STATEMENT OF THE PROBLEM AND SIGNIFICANCE OF THE PROJECT
Consumer behavior is a broad area of study that crosses over the fields of economics, marketing, sociology, psychology, anthropology and other fields (Peter, J. P. & Olson, J. C., 1990). Within each of these broad areas of study are more specialized topics including household economics, buying behavior, culture, technology, and tourism. These fields of study are not exclusive of the others, but are very much interrelated. Researchers in each area continue to develop theoretical constructs through rigorous empirical analysis. These efforts are important, and indeed necessary, in order to advance the science within each area of study and to develop the constructs that tie together the other related fields of study. To date, no published studies have analyzed the effect of socio-demographic and economic factors involving household time constraint variables on the decision whether to purchase tourism package and non-package trip modes.
While the main focus of the current research effort focuses on a specific topic in the field of tourism, some mention is made regarding the interconnections of the related fields of research within the page limits of this proposal. By including the contributions, strengths, and insights that are provided within these areas of study a better research result is believed to be forthcoming. An example from the real world will help to illustrate the connections between the broad areas of study involved.
The Contribution of Thomas Cook [to tourism]
The invention of steam locomotion brought mobility to people who might not otherwise have been able to travel long distances from home. And it did this at unheard-of low prices. The initial impact of rail travel was to increase short day-trips. Excursion trains were more fully developed by [Thomas] Cook. His first publicly advertised excursion was from Leicester, England to a temperance demonstration in Loughborough on July 5, 1841. The round-trip fare was one shilling, and 570 people paid the price. From this relatively modest beginning, Cook went on to build an organization that has been a household word in travel ever since. In 1855, he started his first continental operation by marketing travel to the Paris Exhibition. This was the origin of the inclusive tour.
Cook offered an itinerary that might have taken the individual tourist weeks to organize and a good deal more to finance. Cook’s success, however, can be attributed to other factors besides these. In the nineteenth century, there was no established tradition of extended travel among the new middle classes, and there were formidable practical obstacles to surmount. There were language problems, prejudices at home and abroad, confusing monetary exchange rates, and, finally, passports. The rich overcame these difficulties when traveling by using their money - by employing personal guides and patronizing hotels whose employees spoke the traveler’s language. The new middle-class tourists could not afford these services, however, and so turned to Thomas Cook. Cook had the foresight to recognize these problems, and he built an organization which helped solve them. The influence of Cook in the field of travel cannot be overemphasized.
Cook’s classic story from tourism history includes many topics that are studied in the various fields of research mentioned above. In it are components of household economic theory including the relationships between work and leisure time, changes in income, discretionary income, and utility. The marketing concept (identifying a need and responding with an appropriate offering) is a main theme of the story. Anthropology and sociology are evident in the references to the changing cultural activities and norms and the desire to broaden one’s experiences and status. Changes in buying behavior is implied as travelers redirect their discretionary income toward a new alternative form of leisure that may have required trade-offs between other desired products and services. Psychology is apparent in travelers’ apprehensions of traveling to unfamiliar and hostile (prejudicial) environments.
Tourism, in this particular story, was the common thread that presented an opportunity for interactions and influences of these sciences. Take away the influence of any one of these components and this important turn in history that impacted the fields of economics, marketing, anthropology, sociology, psychology and buying behavior would not, indeed could not, have taken place. Such are the relationships of economics, marketing, anthropology, sociology, psychology, and consumer behavior in today’s tourism context. Together they contribute to, and are a part of, the field of tourism research. Tourism, however, is not a science like economics, psychology, or sociology. There is no universal theory for tourism, but rather it is a specific industry or group of activities in which the influences of these fields, in combination, manifest themselves in a specific context.
A single research effort seldom if ever captures sufficient information that would enable simultaneous evaluation of all the influences on a particular consumer behavior activity. Rather, individual parts to the larger construct must be studied in order to contribute to the larger scientific pursuit. The study of tourism then, is really the study of the impact of one or more of these influences on tourist behavior. The purpose of the proposed study, then, is to study a subset of these influences on a particular travel behavior. More specifically, this study will explore the impact of various household economic variables, household time constraints, and demographics on the purchase of tourism travel packages.
REVIEW OF LITERATURE
The manner in which a household allocates the finite resource of time to various activities is widely studied and incorporated into many fields of research. Many products and services available to consumers are designed to minimize work time and to maximize leisure time (Alenezi, M. & Walden, M.L., 2004). Oropesa, R. S. (1993) argued and showed that, because of increasing time constraints, American households adopt various kinds of time-saving technologies and services. In particular, Oropesa examined the adoption of microwave ovens in this time-saving context which reduce time spent in meal preparation and allows more time for other work or leisure activities.
Services can also perform the function of reducing work time and increasing leisure time. Jacobs, E., Shipp, S., & Brown, G. (1989) found that when a wife becomes a second earner that families will begin to spend more on time-saving services such as food away from home (restaurant meals). Weagley, R. O. & Norum, P. S. (1989) found that the value of time was significant in households purchasing several household care and maintenance services. In a like manner, travel agents and travel brokers can simplify and shorten trip planning and coordination work (Michie, D. A. & Sullivan, G. T., 1990) by providing travel information, making reservations, securing admission tickets, and coordinating schedules of activities. While travelers who have taken package trips have indicated that they participate in travel package programs for convenience (Sheldon, P. J. & Mak, J., 1987), it is unclear in the literature whether or not travelers who have work/leisure time constraints and who would be prospects for buying time-saving technology and services are also buying travel package programs for the time-saving benefit.
The field of economics commonly divides time use into the two broad categories of work time and leisure time. The definitions of what constitutes work time activities and leisure time activities are not universal within the economic community. For the purpose of this research effort the definitions proposed by Bryant, W. K. (1990) will suffice.
Work time is divided into market work and household work. Market work includes time the individual spends working for pay (Solberg, E. J. & Wong, D. C., 1991; Bryant, W. K., 1990). Household work includes time the individual spends in household production activities like cooking, laundry, lawn and garden care, child care, shopping and family managerial activities (Solberg, E. J. & Wong, D. C., 1991; Bryant, W. K., 1990). Of particular interest in the current study is the time involved in the planning of leisure travel which, by the above definition, would be consider as a family managerial activity.
Time is a finite resource which requires time allocation to both work and non-work activities. In order for a family to maximize satisfaction, a household will tend to allocate its time in order to maximize satisfaction (leisure time) and to minimize work (market and household time) within its economic, technical, legal, and sociocultural constraints (Garden, R., 2001; Bryant, W. K., 1990).
American households are facing severe time constraints as women increase their participation in the wage economy. The implications of this situation is the adoption of time-saving technology in the form of products (Oropesa, R. S., 1993; Wales, T. J. & Woodland, A. D., 1977) and services (Nayga, R. M. & Capps, O., 1992; Jacobs, E., Shipp, S. and Brown, G., 1989). Businesses and manufacturers have sought to capitalize on these trends by developing new products and services that promise to alleviate the felt time constraints (Gross, B. L. & Sheth, J. N., 1989) (cited in Oropesa, R. S., 1993).
Likewise, trip planning (the process of gathering travel information, making travel arrangements, and coordinating schedules and activities) can be considered a tourism (leisure) activity, but would be considered a work activity by Bryant, W. K. (1990). More specifically, it is an example of a household managerial activity. While there may be an element of satisfaction involved (talking to pleasant people in distant places, etc.), it is not usually the performance of these functions that gives satisfaction. Trip planning is the work activity necessary to obtain the desired outcome - well planned and executed trips, pleasing leisure activities, etc.
Households caught in a time-crunch have been shown to seek out and buy time-saving products and services (Oropesa, R. S., 1993; Nayga, R. M. & Capps, O., 1992; Jacobs, E. & Shipp, S., 1990; Jacobs, E., Shipp, S., & Brown, G., 1989; Weagley, R. O. & Norum, P. S., 1989). The travel package service offers opportunities to save households time in the managerial task of planning the details of the trip. It would seem reasonable then that, if the time-saving benefit is recognized, households that have purchased other time-saving products and services would be more inclined to buy package travel programs. This in essence is one of the areas of research proposed for the current study.
Kelly, J. R. & Godbey, G. (1992) defined sociology as "the study of people in a society." The American Heritage Dictionary (1985) defines sociology as "the study of human behavior, esp. [sic] the study of the origins, organization, institutions, and development of human society." The factors involved that help shape the social norms and the direction in which a society develops are many.
Anthropology and sociology are closely related. While anthropology tends to be historical in nature, cultural and social patterns developed in the past often have a dramatic influence on the way people use time today. Sociology, on the other hand, tends to be more current in nature. The study of social behavior, especially within cultural groups, and the manner in which different groups of people live and manage their time, can have important ramifications on the use of time in the context of tourism activities.
"In the Twentieth Century, leisure has emerged as a critical issue in people’s lives. Increased material standards of living, better health, increased levels of education, a declining percentage of life devoted to work, and greater personal freedom have provided, for many, a vastly increased potential for leisure. The use of free time in voluntary and pleasurable ways is an expected, and often realized, part of life in postindustrial societies" (p. vii) (Kelly, J. R. & Godbey, G., 1992). Several sociological variables related to travel and tourism will be included in the proposed study.
Tourism and the Travel Package
Sheldon, P. J. (1986) defines a tour package to be a combination of several travel components provided by different suppliers, which are sold to the consumer as a single product at a single price. Consumers, however, may not know the prices of the individual components (Sheldon, P. J. & Mak, J., 1987; Bar-On, R., 1989). Typically, the package components are (1) one or more forms of transportation (fly/drive, fly/cruise, motorcoach, rail); (2) accommodations; (3) meals; (4) attractions and events (sightseeing, entertainment, recreation, special events); and (5) extras (baggage handling, tips, taxes, guides, coupons for restaurants and shops, etc.) (Chang, P., 1991; Sheldon, P. J. & Mak, J., 1987).
Before arrangements can be made about a trip, the person(s) planning the trip must first engage in an information search process. Usually people in the vacation group share in the information search process, and often several sources of information are consulted in planning a trip (Meyers, P. B. & Moncrief, L. W. 1978; Capella, L. M. & Greco, A. J. 1987; Nichols, C. & Snepenger, D. J. 1988) (cited in Snepenger, D. J. et al. 1990). Thus the search process often involves one or more individuals along with a variety of sources for a multiple set of decisions. The search and planning horizons (how far ahead of the trip travelers begin planning seriously for trips) can also vary depending on the trip destination chosen.
For some travelers, the decision-making process is a long sequence of information acquisition and comparison of alternatives. For others, it may be an impulsive "last minute" decision. For a self-organized vacation, the process requires a sequence of decisions about meals, excursions, and other activities (Van Raaij, W. F., 1986). Van Raaij’s use of the phrase "self-organized vacation" is referring to the non-package travel mode alternative. He implies that this trip mode may involve a longer information search and decision-making time frame. This time involvement usually requires time trade-offs from other activities, and this time has a monetary value.
For those consumers which choose to take trips, they spend a portion of their finite amount of time planning their trips and then use more time during the trip itself. Those which choose the non-package trip mode may spend more time in the planning process (+) than those which choose the package trip mode.
Of the many studies focusing on package tours, only a few have examined the characteristics that prompts travelers to choose between taking independent (non-package) trips and package trips. None, however, examined the choice between the package and non-package trip mode from the perspective of household economic theory involving the allocation of time. One of the major objectives; of the proposed research is to examine the household’s choice between the package and non-package travel alternatives from this perspective.
RATIONALE FOR THE STUDY
The research into package travel behavior is relatively new. A complete understanding of which travelers are likely prospects for purchasing travel packages has yet to be determined. More theory development and investigations into causal relationships in the area of travel package purchases is needed. A better understanding of this specialized area of tourism would benefit marketers in developing and promoting travel packages.
Of the studies that have focused on package travel only a few have examined the characteristics that prompts travelers to choose between independent (non-package) trips and package trips. These studies have relied heavily on demographic variables or on after-the-fact information that has made identification of these travelers before-the-fact difficult, if not impossible.
The literature review indicated that some people who purchase travel packages may do so to save time in the travel planning process. To date, no studies have analyzed the combined effects of demographic and economic factors, including measures of household time constraints, on the decision to choose between package and non-package trip modes. The current research effort is intended to fill this gap.
The suppliers of travel programs, especially travel agents and brokers and destination businesses, would benefit from a study that would provide more complete information regarding the demographic and time-constraint profile of consumers who are inclined to purchase travel packages. To date most investigations related to this area of research have been primarily descriptive in nature. To know that an ‘average’ customer is 38.7 years old, has completed 1.3 years of college, has an income of $24,253 and has 2.1 children and two-thirds of a dog does very little to help marketers. While age, income, education, and other demographic information tell us whether an individual is a likely prospect for travel services in general - but rarely will such information help to explain why the traveler makes various decisions.
The proposed investigations would also help researchers in the other related areas of scientific inquiry to understand and further develop the constructs related to this area of consumer behavior involving travel, package trip purchase behavior, and economics.
The first objective; of this study, then, is to identify and test the combination of economic and demographic variables which influence two dependent variables, (a) whether or not a leisure trip is taken, and (b) whether a trip is taken as part of a package or by making individual arrangements (non-package).
A second objective; is to propose a new profile of the travelers that tend to purchase packages, reconfirming relevant variables that have been identified in previous studies and combining these with the time constraint variables that will be identified. From this effort, a new profile of travelers that are more likely to purchase travel packages will be offered. This assumes, however that the combination of a demographic-based prediction model with a time-constraint-based model will provide superior predictive efficacy than each model is capable of doing independently.
The independent variables of anticipated significance are those that can be measured before the trip occurs. These will include; earned income, unearned income, number of earners, education, type of occupation, number of full-time earners, number of hours worked for pay, race, gender, age, marital status, household size, number and ages of children, proxy variables representing the family life cycle, and historical use of travel packages.
The first set of hypotheses relate to whether or not households took any leisure trips during the survey period.
H1 - Major Hypothesis: There are significant differences in key variables of households which take trips and those which do not. More specifically, the following minor hypotheses will be tested.
H1a: The earned income of households which are more likely to take leisure trips is greater than that of households which are less likely to take leisure trips.
H1b: Households with two full-time earners are more likely to take leisure trips than households with one earner.
H1c: Households of greater size will be less likely to take leisure trips.
H1d: Households with higher levels of education are more likely to take leisure trips than households with lower levels of education.
H1e: White households are more likely to take a leisure trip.
The second set of hypotheses is directed at households that did take a trip during the survey period, and whether or not they purchased a travel package.
H2 - Major Hypothesis: There are significant differences in key variables of households which purchased leisure package trips and those which take non-package leisure trips. More specifically, the following minor hypotheses will be tested.
H2a: Households with higher levels of earned income are more likely to purchase package leisure trips.
H2b: Households with two full-time earners are more likely to purchase package leisure trips than households with one earner.
H2c: Households with higher levels of education are more likely to purchase package leisure trips.
H2d: Households which purchase more time-saving products and services are more likely to purchase leisure travel packages.
H2e: As the age of the reference person increases the household will be more likely to purchase leisure travel packages.
H2f: Households with young children are more likely to purchase leisure travel packages.
H2g: As the size of household increases the purchase of leisure travel packages decreases.
The third hypothesis relates to the predictive capabilities of the regression models.
H3 - Major Hypothesis: The model containing both the demographic variables and the time-constraint variables will have a higher predictive capability than the models containing only the demographic or the time-constraint variables alone.
The Consumer Expenditure Survey Quarterly Interview panel survey will be used in the current analysis. This data is gathered by the U.S. Bureau of Labor Statistics and the U.S. Census Bureau (CES-BLS). Before analysis can be performed some preliminary data manipulation will be required. Trips for the purpose of leisure are of particular interest in this study. A preliminary review, however, shows that the CES-BLS data combines trips that are for either leisure or business purposes, or which were paid by someone from outside the household. To include trips for which the household received partial or full payment from outside sources, or which were not for leisure, would produce misleading results. Other data manipulations will be needed as well, to control for multiple observations per household, etc.
Since the assumptions for ordinary least squares regression (OLS) would be violated if used in the current study, the use of another, more appropriate, regression technique is necessary. "Logit modeling achieves a general purpose, serving whenever the measurement assumptions for classical multiple regression fail to be met, for either the independent or dependent variables" (DeMaris, A., 1992, p. vi). Furthermore, "logit analysis provides an interpretable linear model for a categorical response" (DeMaris, A., 1992, p. 1), and is specially designed for a binary response (Mendenhall, W. & Sincich, T., 1989).
"The logistic model was originally developed for use in survival analysis, where the response y is typically measured as 0 or 1, depending on whether or not the experimental unit (for example, a patient) "survives". The mean response E(y) can never fall below 0 or above 1. Thus, the logistic model assures that the estimated response y^ (i.e., the estimated probability that y = 1) lies between 0 and 1" (Mendenhall, W. & W. & Sincich, T., 1989).
The current study focuses on essentially the same type of probability situation. Given a certain set of variables, travelers decide either to take a non-package trip (0) or a package trip (1) with the probability never being below zero or above one.
"Logit" is the natural logarithm of the odds, or the "log odds". The odds indicate the relative probability of falling into one of two categories on some variable of interest (DeMaris, A., 1992, p. 2). A general, multivariate logistic model (Mendenhall, W. & W. Sincich, T., 1989) for the current study, not including interaction terms, can be written as follows:
exp(βo + β1x1 + β2x2 + ...+ βkxk)
E(y) = -------------------------------------------------
1 + exp(βo + β1x1 + β2x2 + ...+ βkxk)
The notation ‘exp’ represents the irrational number e (the base of natural logarithms) raised to the power of whatever is in the parentheses (Aldrich, J. H. & Nelson, F. D., 1984, p. 34).
Two logit regressions will be run against two subsets of data to examine the dependent variables of interest. The first set of data will include observations for both travelers and non-travelers and the dependent variable will be trip (yes/no). The second set of data will include only those households that have reported taking a leisure trip. The dependent variable would be type of travel (package/non-package).
Sign Variable Notation
(+) earned income i
(+) unearned income u
(+) number of earners e
(?) type of occupation (job) j
(+) number of hours worked for pay h
(?) race r
(?) gender g
(+) age a
(-) household size s
(?) family life cycle f
(+) time-saving products & services t
(-) recreation durables d
Alenezi, M & Walden, M. L. (2004). A new look at husbands’ and wives’ time allocation. The Journal of Consumer Affairs. 38(1)
Bar-On, R. (1980). Travel and tourism data: A comprehensive research handbook on the world travel industry. Oryx Press: Phoenix.
Bryant, W. K. (1990). The economic organization of the household. New York: Cambridge University Press.
Capella, L. M. & Greco, A. J. (19__). Information sources of elderly for vacation decisions. ___________. ___ ___ ___ ___.
Chang, P. (1991 unpublished thesis). A study of tour modes and mode choice model by australians. RHIT Department, Purdue University, Alastair Morrison, Advisor.
Garden, R. (2001). The new trend in family vacation. American Demographics. August 2001.
Jacobs, E., Shipp, S., & Brown, G. (1989). Families of working wives spending more on services and nondurables. Monthly Labor Review. 15-23.
Kelly, J. R. & Godbey, G. (1992). The sociology of leisure. State College, PA: Venture.
Michie, D. A. & Sullivan, G. T. (1990). The role(s) of the international travel agent in the travel decision process of client families. Journal of Travel Research. 29(2), 30-38.
Nayga, R. M. Jr., & Capps O. Jr. (1992). Determinants of food away from home consumption: An update. Agribusiness. 8(6), 549-559.
Oropesa, R. S. (1993). Female labor force participation and time saving house technology: A case study of the microwave from 1978 to 1989. Journal of Consumer Research. 19, 567-579.
Peter, J. P., & Olson, J. C. (1990). Consumer behavior and marketing strategy (2nd ed.). Homewood, IL: IRWIN.
Sheldon, P. J. & Mak, J. (1987). The Demand for Package Tours: A Mode Choice Model. Journal of Travel Research. 23(3), 13-17.
Solberg, E. J. & Wong, D. C. (1991)?. Family time use: Leisure, home production market work, and work related travel. The Journal of Human Resources. ___(__), 485-510.
Van Raaij, W. F. (1986). Consumer research on tourism: mental and behavioral constructs. Annals of Tourism Research, 13, 1-9.
Wales, T. J. & Woodland, A. D. (1977). Estimation of the allocation of time for work, leisure, and housework. Econometrica. 45(1), 115-132.
Weagley, R. O. & Norum, P. S. (1990). Household demand for market purchased, home producible commodities. Home Economics Research Journal. 18(1), 6-18.
FINAL PRODUCT AND DISSEMINATION
Documents and reports as required for the grant
Potential Research Journals:
American Journal of business and Economics
Annals of Tourism Research: A Social Sciences Journal
Applied Business Review
Consortium Journal of Hospitalty and Tourism
Cornell Hotel and Restaurant Administration Quarterly
Current Issues in Tourism
International Journal of Contemporary Hospitality Management
International Journal of Hospitality & Tourism Administration
International Journal of Hospitality Management
International Journal of Tourism Research
Journal of Business & Economic Studies
Journal of Business and Behavioral Sciences
Journal of Business & Economic Studies
Journal of Business and Behavioral Sciences
Journal of Business and Economics
Journal of Consumer Behavior
Journal of Consumer Marketing
Journal of Consumer Research
Journal of Hospitality & Leisure Marketing
Journal of Hospitality & Tourism Research
Journal of Interactive Marketing
Journal of Marketing Theory and Practice
Journal of Travel & Tourism Marketing
Journal of Travel Research\
Journal of Vacation marketing
Research in Consumer Behavior
State tourism offices
Various state and regional tourism publications
Various state and regional tourism associations
Various travel agent associations
Various tourism conferences and conventions
SUMMARY PROJECT BUDGET (Revised)
Project Title The Influences of Household Demographics and Time Constraint Conditions on the Purchase of Leisure Travel Packages
Project Director(s) Jon G. Fields, Ph.D.
I. Salaries and Wages
A. Faculty Stipend(s)
1. Name Jon Fields $3241
2. Name $0
B. Student Help $0
Salaries & Wages Subtotal $ 3241
A. Meals $0
B. Transportation $0
C. Lodging $0
Travel Subtotal $0
III. Supplies & Services
A. Consumable Supplies $0
B. Duplicating, postage, communications, etc. $0
Supplies & Services Subtotal $0
IV. Equipment (Purchase of BLS/CES data sets) $ 290
Equipment Subtotal $ 290
TOTAL REQUESTED $ 3531