We are interested in measuring the demand of tourism for Taiwan, of both Taiwanese and foreign tourists, and simultaneously consider length of stay and expenditures as two measures of demand. Using data from the Tourism Bureau of Taiwan, we employ the Zero-truncated Negative Binomial model to study the effect of income, prices, and other characteristic variables. Based on empirical results, we first find that income would affect the demand of tourism for Taiwan significantly and this effect varies by different characteristics of tourists. Second, the variation of tourism demand is large between peak and off-peak dates. Third, tourism in Taiwan is not attractive to high-end businesses and high-budget foreign tourists.
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