Travel Expenditure Patterns of Elderly Households in the us

Abstract

A growth in senior travellers' market has caused an increasing interest of marketers in this segment, promising new pastures. This paper delves into this group to explore variables that affect the choices that these people make. Using the 1995 Consumer Expenditure Survey, this study (a) examines the travel-related expenditure patterns of U.S. households headed by those 55 years old and older; and (b) uses a double-hurdle model to identify factors that influence the decision to travel and the level of travel expenditure among this elderly segment. In order to reflect the heterogeneity among the elderly, the total sample (n=1,588) is divided into three groups: young-old (aged 55 to 64), old (aged 65 to 74) and very old (aged 75 and above). Elderly households spend the most on transportation, followed by food, lodging, sightseeing and entertainment, and other travel expenses. Probit results show that elderly who are Whites, those who have high school or college education, those who are married, and those who are homeowners are more likely to travel than their counterparts. High levels of after-tax income, liquid assets, and non-liquid assets increase the likelihood of travelling by the elderly. The results of truncated regression analysis indicate a curvilinear relationship between age and travel expenditure, with travel expenditures increasing at early stages of aging but decreasing at late stages of aging. Travel expenditures increase as household after-tax income increases. Implications relative to the travel industry are drawn.