Simultaneous analysis of whether and how long to go on holidays

This article assumes that the decision to go on holiday and the length of stay are nested and non-independent, thus the objective of this study is to propose a two-stage choice process: going on holiday and length of stay. To do this, we rely on the random-parameter logit model, which accounts for the unobserved heterogeneity of individuals and allows representation of different correlation patterns among non-independent alternatives. We propose hypotheses on the effect on the above decisions of individual's characteristics relating to the destination, personal restrictions and socio-demographic and psychographic characteristics. The empirical application, which is carried out in Spain on a sample of 3781 individuals, evidences the proposed two-stage choice process, and that these decisions also explained by individual tourist characteristics.