LAUSR

This study performs the bootstrap full- and sub-sample rolling-window Granger causality tests, in order to investigate the time-varying causal relationship between the consumer confidence index (CCI) and the outbound tourism expenditure (OTM) in China. For this purpose, it introduces the variable of consumer confidence as a subjective psychological perception variable into the gravity model and explores its impact on the outbound travel. The results reveal that CCI tends to exert positive impacts on the OTM in most subsamples. That is to say that the Chinese consumer confidence can be considered as a catalyst for the OTM. However, the impact tends to be negative during times such as the global financial crisis, caused by the appreciation in the renminbi. In turn, OTM does not affect CCI. This suggests that the only change of private expenditure on outbound tourism cannot alter consumer confidence regarding the current economic and income situation. These findings compel the foreign tourism authorities to take CCI into account, especially when predicating the tourism arrivals from China, and hence plan their tourism strategy accordingly. Also, Chinese travel agencies should ideally take notice of the CCI in order to plan their international tour packages.