Expenditure-Based Segmentation: Application of Quantile Regression to Analyse the Travel Expenditures of Baby Boomer Households

Abstract

The substantial size of the senior worldwide population and its demands have drawn considerable attention, making it the ‘silver economy’ or ‘senior’ market. Baby boomers, those born in the years after the Second World War, or more typically between 1946 and 1964, are the specific focus of this research interest. This paper estimates the determinants of travel expenditures in baby boomer senior households in Taiwan. The traditional ordinary least squares (OLS) approach, combined with quantile regression analysis, is adopted to capture both the mean and quantile behaviours of travel expenditures in baby boomer households, using the 2008 Survey of Family Income and Expenditure (SFIE) in Taiwan. The OLS model is used to obtain the average (mean) expenditure behaviour, whereas quantile regression analysis captures the extreme behaviours of the two tails of travel expenditures in baby boomer households. The estimation outcomes have important policy implications for travel marketers and operators in the tourism industry who seek to understand baby boomer senior consumers.

Keywords

baby boomers senior market senior tourists travel expenditure quantile regression Taiwan

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