Purpose The purpose of this paper is to explain prevalent earnings differentials in Gulf Cooperation Council’s (GCC’s) private sectors between skilled local and migrant labor and provide estimates of potential price distortions to underlie future market-based corrective policies that increase participation of locals in private employment. Design/methodology/approach The paper uses an individual-level data set on workers’ earnings and productivity-related characteristics to decompose estimated earnings differentials at the mean level and at various percentiles of the earnings distribution via well-established decomposition approaches. Findings Results show that the real earnings differential between locals and Asians decreases at higher earnings, while that between locals and non-GCC Arabs are relatively stable. Both are characterized by overpayment of locals, that is, self-inflicted by current nationalization policies. Higher earnings of Westerners are due to their superior productivity-related characteristics. Research limitations/implications Due to the lack of official individual-level data on workers’ productivity-related characteristics, this paper is compelled to utilize an open-source primary data set. Despite the data set’s ability to reproduce officially published aggregates and produce sound econometric results, findings are not entirely proof against sampling bias. Practical implications The paper demonstrates that the failure of GCC’s nationalization policies is self-inflicted by the current quota system and by the lack of legislative frameworks that ensure equal pay for equal work. Effective nationalization ought to be market based, rather than by fiat. Originality/value The paper is the first to analyze GCC’s private earnings differentials at the individual level and provides micro-econometric evidence on existing price distortions.

This paper introduces conditional counterfactual quantile decomposition methods to the literature on tourism consumption, where observed expenditure differentials are directly referred to differences in tourists’ targeted utility. Decomposition terms are synthesized with the neoclassical framework of utility‐constrained expenditure minimization, such that their interpretations do not rely on the approximation of tourists’ preferences by typical socioeconomic expenditure determinants. Using survey data from an underrepresented sun, sea, and sand destination, we show that differences in tourists’ targeted utility prior to the trip translate exclusively into higher quantities demanded of consumption‐related antecedents, as opposed to higher prices paid by high utility‐targeting tourists. The paper suggests that decomposition analysis may guide profit maximization in the tourism industry.

Tourism expenditures are determined by a set of antecedents that reflect tourists’ willingness and ability to spend, and de facto incremental monetary outlays at which willingness and ability is transformed into total expenditures. Based on the neoclassical theoretical argument of utility-constrained expenditure minimization, we extend the current literature by applying a sustainability-based segmentation criterion, namely, the Legatum Prosperity IndexTM to the decomposition of a total expenditure differential into tourists’ relative willingness to spend and an upper bound of third-degree price discrimination, using mean-level and conditional quantile estimates. Our results indicate that understanding the price–quantity composition of international inbound tourism expenditure differentials assists agents in the tourism industry in their quest for profit maximization.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science. Terms of use: Documents inThe decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly. conclude that after 1999, changes in wage inequality in Germany can be explained by both; changes in workers characteristics and changes in the wage structure, and not by changes in the wage structure alone, as the case has been during the transition process in the first decade after reunification.JEL Classification: D30, J31