The proposed model can provide a theoretically sound mechanism for identifying
complex relationships involved in the travel market, considering both temporal and
spatial variability in demand. The results of the model estimation allow the
classification of different travel commodities into: (a) luxuries and necessities, based
on the (direct and indirect) income elasticities, (b) price elastic and inelastic, based on
own-price elasticities, and (c) substitutes and complements between each other, based
on the cross-price elasticities. Moreover, they help determine the effects of additional
factors, other than income and prices, on the travel expenditure allocation decisions.