Social network and tourism consumption by households: Evidence from China

Abstract

Tourism consumption is not only an important means by which to improve residents' sense of happiness but is also the main way to promote national economic development. In a traditional relational society such as China, it remains unclear how social network affects tourism consumption by households. Here, we evaluated the impact of the social network on tourism consumption by Chinese households using the data of 3254 samples from the China Family Panel Studies. The empirical results from the ordinary least square method showed that the social network promotes tourism consumption, which can be projected to increase by about 28% for every 1% increase in social network strength. This was further confirmed using the instrumental variable method to address the issue of endogenous social network formation, as well as other robustness checks. The impact of the social network on tourism consumption was heterogeneous. Compared with other residents, there were higher positive effects for high-income families, households with a head aged 35-44 years, urban families, and households in eastern China. The quantile regression results revealed that the impact of the social network was weakened with increasing tourism consumption by households. These results are crucial for policymakers, in that they could form good habits of tourism consumption and strengthen tourism market management, especially for the management of tourism negative events in the context of new media.