Tourism participation and expenditure by Spanish households: The effects of the economic crisis and unemployment

• This paper examines household tourism participation decisions and tourism expenditure across the business cycle (2006–2010).
• By estimating a Heckman model, the stability of the tourism consumption model across the business cycle is tested.
• This paper also extends literature on tourism demand by analysing the effect of unemployment and the risk of a job loss.
• The results show that unemployment and a higher risk of a job loss lower significantly tourism participation and expenditure.
• The unconditional income elasticity on tourism expenditure takes a value well above one, while the conditional one is 0.69.

This paper examines household tourism participation decisions and tourism expenditure across the business cycle. Microdata is used from the Spanish Household Budget Survey for the years 2006–2010, facilitating an analysis of the consequences of the economic crisis and unemployment on tourism consumption decisions by households. By estimating a Heckman model, the effects of households' socioeconomic determinants on participation and expenditure decisions can be identified. Taking the year 2008 (the beginning of the crisis) as a reference, the stability of the tourism expenditure model is tested, identifying variables whose effects alter in times of crisis. One important aspect of the study is how household unemployment affects tourism participation and expenditure decisions. The effect of unemployment takes into account whether it is the main breadwinner, his or her spouse, or another member of the household who is unemployed. Concentrating on those households whose main breadwinner was employed at the time, an analysis is also made of how job insecurity affects tourism consumption decisions. From the results, the unemployment variables can be seen to have a significant explanatory power, suggesting that unemployment information does help to explain the evolution of tourism expenditure across the business cycle.