Distance Travelled by Tourists-an Econometric Approach Essay

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Distance Travelled by Vacationers 1. Introduction The summer holiday season is a period of time that most people look forward to, and many will use this opportunity to travel to a tourist location or holiday home. Many goods and services sectors, and tourist locations will rely on this period for the majority of their revenues. Consequently, an understanding of the factors that influence the behavior of holidaymakers will be of great use to the marketing efforts of companies, and tourist locations. The objective of this assignment is to examine some of the factors that will influence the distance holiday makers travel when vacationing. The OLS model I have established will determine whether a holidaymaker’s age, income level and number of children will influence the distance(miles) they travel when going on vacation, and if so to what extent. The data set was obtained from the University of Daytona, and was part of an assignment for an Economics course in 2006 by Prof. Dr. Gustafson. The data consists of 200 observations of individuals from Chicago who went on a summer holiday. The analysis starts with an investigation of the descriptive statistics for the data set, and is followed by the results of both the initial OLS regression model, and the altered model adjusted to HAC errors. An analysis of the assumptions of a CLRM follows, after which an interpretation is done of the results of the model. The analysis then proceeds with a Wald test to examine the last two regressors of the model, after which the results are concluded. 2. Descriptive Statistics The data consists of 200 observations of holidaymakers from Chicago, and relates the individuals income (measured in US $), age, and number of children to the miles they travel when going on a summer holiday. Table 1 provides the mean, median, maximum, minimum and standard deviation for the data.

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