The impact of visitors satisfaction in explaining expenditure behaviour : A structural equation modelling approach

Abstract: Visitor expenditure can be affected by different economic, socio-demographic and psychological variables. Previous literature have focused on the use of observed tourists and destination characteristics as explanatory variables to explain visitor expenditure, whereas the use of psychological factors has been underresearched. The present study aims to fill in the gap in the existing literature through the exploration of more extensive use of psychological variables. This is accomplished by the use of structural equation modelling (SEM), a methodological approach which seems not to have been applied before in tourism expenditure econometric models. In econometrics expenditure research, Mortazavi (2018) found satisfaction to be an endogenous regressor of expenditure. Hence, the contribution of our model is that it allows for the relationship between visitor satisfaction and visitor expenditure, and vice versa, to be tested simultaneously. Consequently, under this context we may identify the magnitude of one variable impact on another while at the same time accounting for simultaneous relationship between the two paths. The findings of this study go in hand with previous literature and economic theory which have found a positive relationship between visitor satisfaction and visitor expenditure.