Gravity models for tourism demand: theory and use

• Theoretical foundations for gravity models in the context of tourism are provided.
• Gravity models for tourism demand are derived from consumer choice theory.
• Gravity models are linked to aggregated tourism demand equations.
• Estimation procedures for gravity models are suggested.

Neglected by the tourism demand literature for the last decades, gravity models have re-emerged as a way for modeling tourism demand when the role of structural factors on tourism has to be evaluated. From the initial formulation of the gravity model, more sophisticated specifications have been developed including a more complete set of explanatory variables and allowing differentiation between origin and destination countries. In this paper, we propose a theoretical background to the gravity model for bilateral tourism flows derived from the individual utility theory. The issues in distinguishing the recent versions of gravity models from aggregated demand models are shown and the suitability of this methodology when structural factors have to be evaluated and quantified in the context of tourism demand is discussed.