The Determinants of Expenditures by Canadian Visitors to the United States

Abstract

The quarterly expenditures of Canadian visitors to the United States over the period 1979 to 1989 are analyzed using regression analysis. Both real per capita same day and one or more nights trip expenditures are positively and significantly related to real per capita income and negatively and significantly related to the real exchange rate expressed as Canadian dollars per U.S. dollars. Both same-day and one or more night expenditures demonstrate strong seasonal variation. Only one or more nights automobile trip expendi tures are positively and significantly related to the exchange rate adjusted ratio of Canadian to U.S. gasoline prices. The exchange rate is a key determinant of expenditures by Canadians visiting the United States. Same-day automobile trip expenditures, which can be taken as a proxy for cross-border shopping, exhibit a real exchange rate elasticity of -2.31%.