An Empirical Comparison of Systems of Demand Equations for Tourist Expenditures in Resort Destinations

Edwin T. Fujii, Mohammed Khaled, James Mak


In this paper, we employ the systems approach to the estimation of demand equations. We model visitor expenditures on six different categories of goods at a major resort destination,Hawaii.This study breaks new ground in several respects: (a) we apply systems estimation techniques to a new area -- detailed budget data on visitor expenditures at a given resort destination, (b) we compare elasticities generated by the linear expenditure system and the Rotterdam model with the almost ideal demand system, a new functional form that has not been extensively tested empirically, and (c) we improve on a method suggested by Parks to measure goodness of fit in the Rotterdam model.

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