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Face-to-face or cyberspace? Choosing the Internet as an intermediary in the Israeli travel market

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Existing studies of the trend towards electronic provision of travel services tend to be highly bifurcated. They focus either on the supply-side characteristics of this change (new technologies and mediation platforms) or on the demand-side attributes, such as the socio-economic profile of the Internet user and attitudes towards electronic purchasing in the travel market. The latter approach, however, can lead to sample selectivity bias and misleading parameter estimates. It fails to recognize that actual Internet travel purchases are observable only for individuals who have made the prior decision to use the Internet as a market intermediary. This paper addresses this drawback by modelling the decision to purchase travel products on the Internet in a bivariate probit framework. The choice of travel service intermediary, travel agent (face-to-face) or Internet (cyberspace), is determined by the joint probabilities of general Internet purchasing and specific Internet travel purchasing. Using unique survey evidence of actual Internet transactions, the discrepancies between preferences for Internet travel purchasing and actual travel purchases are highlighted. The results suggest that demand for the latter is more closely related to previous Internet purchasing experience than to the socio-economic attributes of the purchaser.


Document Type: Regular Paper


Publication date: September 1, 2004

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  • Tourism Economics, published bimonthly, is a peer-reviewed journal devoted to the economics and finance of tourism worldwide. Articles address the components of the tourism product (accommodation; restaurants; merchandizing; attractions; transport; entertainment; tourist activities); and the economic organization of tourism at micro and macro levels (market structure; role of public/private sectors; community interests; strategic planning; marketing; finance; economic development).

    Fast Track. Tourism Economics Fast Track papers have been peer-reviewed, revised and fully accepted for publication. However, although these are the final versions from the authors, they are unedited manuscripts and will undergo a rigorous editing process before their appearance in an issue of the journal. This means that the Fast Track manuscripts may not conform to journal style in terms of presentation, spelling and other usages. They may also contain errors of typography, grammar, spelling, referencing, etc, all of which will be corrected in the processes of copy-editing and proofreading.
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    Once the paper has been published in an issue of the journal, the DOI will automatically resolve to that final version and the article can be cited in accordance with normal bibliographical conventions.

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