Understanding the trend of household tourism spending: income and socio-demographical disparities

Abstract

This study explores household tourism expenditure in Bangladesh, with a particular interest in how these differ according to household income and socio-demographic characteristics, using data from the Household Income and Expenditure Survey (HIES) for 2010, 2016, and 2022. Leveraging OLS, IV 2SLS, Lewbel GMM, and Blinder-Oaxaca decomposition approaches, the study uncovers the key changes in household behaviour and reveals the determinants of tourism expenditure over time. The outcomes demonstrate that the income elasticity of tourism expenditure significantly increased, suggesting changing priorities and an improved economic situation. Also, tourism spending gaps are compared and explained by geographic (coastal vs. non-coastal), locational (rural vs. urban), marital, and gender diversities, using explained and unexplained perspectives of spending inequality. The findings of this paper offer important policy considerations for promoting equitable tourism growth, regional development, and redressing socio-economic inequalities. Together, these insights will collectively enable a deeper understanding of tourism economics in a developing country and highlight the importance of inclusive policy frameworks in enhancing sustainable tourism development.