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MTEE- UIB

Exercise 3
Decision making of travelling by undergraduate university students in Mallorca
Elisa Guadrn Lilit Miribyan

2012

Introduction
This paper presents the analysis of the first step in the process of decision making about travelling and not travelling in a determined period of time. First, it presents a small description of the 5 steps using EugenioMartin model (2003) and introduces the participation decision as a first step, second, it will explain a research made with university students of Mallorca using a survey, the results and finally the specification and output of a model applied to understand which factors are more influential in this decision making process.

First Step: Participation Decision


Understanding why people travel to different places is a complicated issue, destination choice is a five-step process from micro and macro level points of view (Eugenio-Martn, 2003). These 5 stages are the following: 1. People have to decide whether or not travel within a period of time. 2. Estimate a budget for tourism expenses. 3. Determine frequency and length of stay of their trips. 4. Kind of tourist destination to visit. 5. Final destination and mode of transportation.

This paper will focus on the first step of this decision making process, which is the participation decision concerning the choice between travelling or not within an interval of period. Eugenio-Martin states that resident of a particular region are less interested in travelling than residents of other regions due to several aspects, like age and socio-demographic characteristics between them, but this could also be found in residents of the same region.

Eugenio-Martin identifies age, education, income, labour conditions, characteristics of the place of residence, and size and composition of the household or family, as possible variables that could be significant in the process of deciding whether to travel or not.

Analyzing the participation decision in Mallorca


In order to be able to understand the process of participation decision in travelling or not in Mallorca, a survey was made to analyze this decision

in university undergraduate students, residents of the island during Christmas vacation period, from December 24th to January 6th. The main characteristics of the questionnaire and process of data collection are the following: 1. Survey consisted on 22 questions, 11 of which were made to indicate the participation decision of travelling or not, and the other 11 were about specific characteristics of people travelling. 2. Survey data collection was made between December 20th to 23rd 3. On the survey there were a small paragraph indicating the instructions for filling the questionnaire. 4. Data was collected in UIB and private school in Mallorca. 5. All students interviewed were studying undergraduate courses. The questionnaire can be found in the Annex 1 of this paper.

Analysis of the results


The results of the survey were students from UIB and other universities participated are presented in this part of the paper. Graph 1 shows the percentage of participation of students from UIB and other universities, 65% of the respondents were female and 35% were male (Graph 2). 98% of students who participated in the survey are from Spain; other (3% of students) are from Germany, Cuba and Italia. All students study on undergraduate program.

There were students from 17 years old to 24 years old; the average age is 20 years old. The majority of students do not work; only 4 people from 51 are working and studying in the university (graph 3).

88% of students have month income less than 500 Euros; 4 students have 501-700 Euros per month; 4% of respondents have month income from 701 Euros to 1000 Euros. The respondents were also asked about their habits, if they usually travel during Christmas and New Year holidays or not, Graph 4 shows that 47% of respondents usually do not travel at all; only 16% or 8 people always travel; 12% usually travel and 25 % or 13 people sometimes travel.

Additional questions, such as Which kind of activities do you prefer on holidays showed next trends: the same quantity of people (25%) prefer to spend time with friend and family; a little bit less figure has travel (21%) and parties (18%). Personal preferences of holidays activities have strong relationship with choice travel or not and with type of travel. The main question of the survey Will you travel or not on Christmas and New Year holidays this year divided 51 respondents on two parts. 65% of participants decided to not travel and 35% said they will travel this year.

After question number 10 about travel choice the questionnaire divided on two parts. For students who will not travel on holidays there is only one extra question about causes of not travelling. Graph 7 shows the results of question 11. The main reason is economic (46%), the second most important reason is spending Christmas and New year with family in Mallorca.

For people who are going to travel there were 11 more questions about details of their expected trip. First, they were asked about expected travel destination. The results are shown in graph 8, 12 students which are 67% decided to travel outside of Mallorca but inside the country; 28% of respondents will to another country (Andorra, Germany, Czech Republic, Cuba, UK) and only 5% of students or 5 people will spent their holidays in trip inside the island.

In the questionnaire the question number 13 about type of travel includes 4 possible answers: travel, visiting friends and relatives, work trip and other. However no one marked work or other. The students divided on two almost the same parts: 52% of respondents said they will visit their

families or friends and 48% will spend their free time for travelling (graph 9). Graph 10 shows the choice in accommodation. The majority of students are going to stay in friends or familys houses. 21% of students will choose 1-3 stars hotels and 16% of students will stay in apartment. Only 1 student chose hostel as an accommodation.

There is a strong relationship between type of the trip and type of accommodation. For instance, 11 people are going to travel for visit friends and family and 10 people from 11 will stay in friends or familys houses. The average of nights the students supposed to stay is 7.7, or in other words one week. Only 2 persons have never been in their future travel destination. The next question number 19 was about activities which they are going to do during the trip., Graph 11 shows the tourists expenditure expectations. According to the graph we can see that the majority of students suppose to spent more money in travel destination, not in Mallorca. The average expenditure in Palma is 236 Euros; the average of expected expenditure in travel destination is 162 euro.

The last question in the questionnaire was about the financial source of the trip. The 54% of students marked personal savings as the main source; the 46% of respondents said that their family will pay for their trip.

Model Methodology
Considering we are analyzing the decision to travel or not to travel, this is the dependent variable, and as the possible results are yes or no, this is a dummy variable. Consequently, it is necessary to use a Binary model, Probit or Logit; and considering that estimations for both models are very similar and differences occur when there are enough observations at the tail of the distributions, we have decided to use a Logit Model. Some variables that the questionnaire contained and could be significant according Eugenio-Martin were: age, sex, labour condition and income. Additionally we decided to include preferences of activities and purchasing habits during this specific time of year that could also be important to explain the decision according to Bonera (2008). Using the basic variables age, sex, income and preferences of activities we obtain the following output:

Dependent Variable: TRAVEL Method: ML - Binary Logit (Quadratic hill climbing) Date: 01/11/12 Time: 18:49 Sample: 1 51 Included observations: 51 Convergence achieved after 5 iterations Covariance matrix computed using second derivatives

Coefficient C AGE SEX INCOME D8_4 D8_2 McFadden R-squared S.D. dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter. LR statistic Prob(LR statistic) Obs with Dep=0 Obs with Dep=1 -4.100988 0.239151 -0.829338 0.001441 -1.163760 -1.295993 0.149285 0.482640 1.339944 1.567218 1.426792 9.886180 0.078525 33 18

Std. Error 4.332246 0.216325 0.687195 0.002326 0.882367 0.736660

z-Statistic -0.946619 1.105515 -1.206845 0.619676 -1.318907 -1.759282

Prob. 0.3438 0.2689 0.2275 0.5355 0.1872 0.0785 0.352941 0.457425 9.415700 -28.16858 -33.11167 -0.552325

Mean dependent var S.E. of regression Sum squared resid Log likelihood Restr. log likelihood Avg. log likelihood

Total obs

51

These results show that the variables included in this model are not statistically significant at 95% to explain the decision of travelling or not travelling during the Christmas holidays. Also it is possible to observe that the R- squared is very low indicating a bad goodness of fit. After trying different models including the other variables and dropping those that were not significant the best model found was the following:

Dependent Variable: TRAVEL Method: ML - Binary Logit (Quadratic hill climbing) Date: 01/11/12 Time: 19:04 Sample: 1 51 Included observations: 51 Convergence achieved after 6 iterations Covariance matrix computed using second derivatives Coefficient C AGE Q9 McFadden R-squared S.D. dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter. -20.21219 0.842487 2.404250 0.509853 0.482640 0.754102 0.867739 0.797526 Std. Error 8.891839 0.414699 0.657622 z-Statistic -2.273117 2.031561 3.655974 Prob. 0.0230 0.0422 0.0003 0.352941 0.305463 4.478760 -16.22960 -33.11167

Mean dependent var S.E. of regression Sum squared resid Log likelihood Restr. log likelihood

LR statistic Prob(LR statistic) Obs with Dep=0 Obs with Dep=1

33.76414 0.000000 33 18

Avg. log likelihood

-0.318227

Total obs

51

The results for this model show a higher R-squared, even though it is still not very good. The two variables included were age and purchasing habits during this time of the year (Q9), both independent variables are statistically significant. So, it is possible to say that the decision making about participating in travelling or not in university students in Mallorca could be more influenced by their age and if they usually travel during this specific time of the year.

Conclusion
According to E-views results the initial model does not work and almost all independent variables are not significant. This difference between theory and practice could be because of small number of observations. There were 51 students questionnaires; for understanding the causes of making decisions the size of observations is very important and in case of small sample size it could not show results clearly. The other reason that could explain other results is age of students. As it was said before, the average age of students is 20 years old. This means that their travel decision does not depend only on their preferences. Even if they want to travel and have money savings they probably have to make this decision along with their family. Also there is relationship between travel choice and the place where their family lives. Usually people try to spend winter holidays with their relatives, Christmas is family holiday. Thats why 37% of respondents said that they will not travel because they are going to spend the holidays with family in Mallorca. Finally, a very big influence on travel decision has economic reason (46% of respondents). It is not a secret that now in Spain is financial crisis. Almost all students are from Spain, so their income and their familys income depends on the economic situation of the country. After interpreting and analyzing our results we can conclude that in order to understand better the decision making process of undergraduate students in Mallorca, it would be better to include other variables related to

family issues such as with whom the students make the decision of travelling, considering that according to the outcomes, they do not decide this on their own.

Bibliography
Bonera, M. (2008). THE VACATION DECISION MAKING PROCESS: TOURISM IN THE GARDA LAKE. 8th Global Conference on Business & Economics, Florence, Italy. Eugenio-Martn, J. (2003). MODELLING DETERMINANTS OF TOURISM DEMAND AS A 5-STAGE PROCESS. Tourism and Hospitality Research .

Annex 1: Survey
Instrucciones: Por favor conteste las siguientes preguntas marcando con una X la casilla correspondiente o escribiendo en el espacio en blanco 1. Sexo: Mujer ___ Hombre ___ 2. Edad: ______ 3. Nacionalidad: __________________ 4. Trabaja: Si___ No ___ 5. Dnde estudia? UIB ____ Otro _____ 6. Cul es su nivel de estudio? Grado ___ Master ___ Doctorado ___ 7. Cul es su nivel de ingreso mensual? 500 o menos ___ 501 a 700 ___ 701 a 1000 ___ 1001 a 2000 ___ Ms de 2000 ___ 8. Qu actividades le gusta realizar durante vacaciones de navidad? (Puede escoger ms de una opcin? Pasar tiempo con la familia ___ Pasar tiempo con amigos ___ Viajar ____ Realizar excursiones ____ Ir a fiestas _____ Otros: _________ 9. Es usual para usted viajar en las vacaciones de navidad? S, viaja todas las navidades ___ La mayora de navidades viaja ___ Algunas viaja y otras no ___ No, nunca viajo en esta poca ___ 10. Realizar un viaje durante esta vacacin de navidad? Si ___ (Pase a pregunta 12) No ___ (Conteste pregunta 11) 11. Por qu no viajar durante las vacaciones de navidad? Razones econmicas ___ Prefiere pasar navidad con su familia en Mallorca ____ No le gusta viajar ____ Ha viajado recientemente ____ Otros (especifique): _______________ (Si NO realizar un viaje en estas vacaciones de navidad, no conteste las siguientes preguntas, gracias) 12. Dnde viajar durante la vacacin? Dentro de Mallorca ____ Fuera de Mallorca pero dentro de Espaa ____ Fuera de Espaa (especifique): _______________ 13. Cul es el motivo del viaje? Vacaciones ___ Visitar Amigos y/o Familia___ Trabajo ___ Otro: _____________ 14. Con cuntas personas viajar? ______ 15. Viajar: Solo(a) ___ En pareja ___ Con Familia ___ Con Amigos ___

Otros___ 16. Qu tipo de Alojamiento utilizar? Hotel de 1 a 3 estrellas ___ Hotel de 4 o 5 estrellas ___ Hostal ___ Apartamento ___ Casa de amigos/familia ___ 17. Cul ser la duracin de su viaje? ________ noches 18. Ha visitado este destino antes? No___ Si____ Cuntas veces? _____ 19. Cules son las 3 actividades principales que va a realizar durante su viaje? Playa ___ Montaa ___ Visitar lugares histricos ___ Visitar lugares culturales ___ Deportes ___ Eventos/Entretenimiento ___ Compras ___ Otros ___ 20. Cunto estima que gastar en Mallorca por el viaje? Pasajes de transporte: __________ Alojamiento: __________ Otros: ____________ 21. Cunto estima que ser su gasto en el destino? Alojamiento: ________ Transporte: _________ Alimentacin: __________ Entretenimiento: _________ Compras: _________ Otros: ___________ 22. Cmo va a pagar por este viaje? Sus padres pagan por el viaje___ Tiene ahorros___

Salario de trabajo ___ Otros (especifique): _________

Gracias por su colaboracin!

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