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Harold L. Vogel
Travel
Industry
Economics
A Guide for Financial Analysis
Third Edition
Travel Industry Economics
ThiS is a FM Blank Page
Harold L. Vogel
Travel Industry Economics

A Guide for Financial Analysis
Third Edition
Harold L. Vogel
New York, USA
ISBN 978-3-319-27474-4 ISBN 978-3-319-27475-1 (eBook)

DOI 10.1007/978-3-319-27475-1
Library of Congress Control Number: 2016935870
© Springer International Publishing Switzerland 2016

This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part
of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations,
recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or
information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar
methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are exempt
from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in this book
are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the
editors give a warranty, express or implied, with respect to the material contained herein or for any errors
or omissions that may have been made.
Printed on acid-free paper
This Springer imprint is published by Springer Nature

The registered company is Springer International Publishing AG Switzerland
To my beautiful mom, whose love
and spirit knew no bounds
Preface
trav·el—involves a trip, a journey, a transmission, and a movement from one place

or time to another
in·dus·try—a specific branch of a craft, art, business, or trade that involves a
division of labor and that requires significant investment capital and employs many
people in organizations with similar technological and organizational structures
used to provide goods and services that are largely substitutable
ec·o·nom·ics—a social science that studies how wealth is created, distributed,
used, and consumed and that considers costs and returns
We are, it seems, all born with a natural curiosity—with an urge to travel. What
normal infant, confined to crib or playpen, doesn’t soon want to explore the world
beyond? What active teenager doesn’t want to explore a new neighborhood or city
or country? And what person hasn’t ever dreamt of how it would feel to travel
across the boundaries of space or time?
The urge to travel is universal. And this makes travel, as broadly defined, a big
business indeed. In the United States, for example, travel and tourism is estimated
to account for approximately 5 % of gross domestic product and to be the third
largest retail industry after automobile dealers and food stores. Clearly, in getting
from here to there and back again, we need lots of goods and services. In fact,
including everything, the travel industry turns out to be one of the world’s largest in
terms of numbers of people employed and in total direct and indirect revenues
generated. Three hundred million people—one of every ten employees world-
wide—and more than US$3.5 trillion out of a total world economic output of
around US$75 trillion are probably reasonable estimates in the second decade of
the twenty-first century.
With an industry so large, it is difficult to even know where to begin. There are
texts relating to hotel or restaurant or casino management procedures and strategies.
vii
viii Preface
There are tomes and stock brokerage house reports and consultants’ papers provid-
ing forecasts for the various travel-related business segments. Statistics of all types
abound.
Yet what seems to be missing is a concise treatment that ties together all the
major industry segments from the perspective of a potential investor and financial
economist. The mission is to thus broadly cover—for anyone who analyzes or
manages or writes about travel-related investments—the financial and economic
dynamics of the businesses that service the needs of people who, whether for
pleasure (tourism) or commerce, require physical transportation: travel, in other
words.
In contrast, the underlying concept of my related work, Entertainment Industry
Economics: A Guide for Financial Analysis, involves a different kind of transpor-
tation—that of people’s emotions. The style of that work, as well as the chapters
providing an economic overview and coverage of casinos and theme parks, has
been largely carried over. As in that volume, only those industry segments that have
clearly defined borders and reliable data histories are examined.
Travel Industry Economics is primarily a text for graduate or advanced under-
graduate students. The minimum requirement, supported by the appended glossary,
is for the reader to have some familiarity with general economics and financial
terminology. However, this work is also intended to be of interest to general readers
and should prove to be a handy reference for executives, financial analysts and
investors, agents and legal advisors, accountants, economists, legislators, regula-
tors, and journalists. The approach is holistic: It recognizes that managers and
analysts concentrating in any one sector increasingly need to also understand how
related and adjacent sectors operate (e.g., airlines and airports, hotels, and tourism).
Instructors should find it easy to design one-semester courses centered on one or
two areas. A minimal grasp of what travel industry economics is all about would
require that virtually all students read at least Chap. 1 and, at the end of the course,
the first section of Chap. 8. But different modules can be readily assembled and
tailored. Among the most popular might be a concentration on transportation
modes, primarily airlines (Chap. 2). Another possibility would be a course covering
hotels, gaming and resorts, theme parks, cruise ships, and tourism (Chaps. 3–7).
To stay focused, however, the larger aspects of transportation industries—which
might further include studies of airport planning and urban public transit—have been
omitted. Analyses of tourism-related subjects that would take the text into areas such
as trade and regional development are also merely sketched, as giving those topics the
full treatments that they deserve would only distract from the primary purpose. For
much the same reason, there is only tangential coverage of subjects that are com-
monly discussed in transport economics—externalities, infrastructure investment
criteria, peak-load pricing, regulation, and social cost-benefit analysis, to name a few.
This third edition updates, refreshes, and significantly broadens coverage of
tourism economics. It further includes new sections pertaining to power laws and
price indexing effects. New charts comparing airline and hotel revenue changes and
lodging revenue changes versus GDP are also introduced. And end-of-chapter
further readings items that can conveniently form the basis for case studies and
class discussions are now indicated in boldface type.
Preface ix
I am indebted to the transportation and travel industry economists upon whose

academic shoulders this work rests. Particularly noteworthy for making the task of
exposition a lot easier than it would have otherwise been are Kenneth Button’s
Transport Economics; Kenneth Boyer’s Principles of Transportation Economics;
Adrian Bull’s The Economics of Travel and Tourism; Rigas Doganis’s airline
economics masterpiece, Flying Off Course, and J. P. (Pat) Hanlon’s Global Air-
lines. Also proving invaluable were Morrell’s text on airline finance, Graham’s on
managing airports, Block’s on REITs, Dickinson and Vladimir’s on cruise ships,
Meyer and Oster’s on intercity passenger travel, Hayes and Ninemeier’s Hotel
Operations Management, and the pioneering works in the casino gaming field by
Friedman, Greenlees, and Scarne. And in tourism, Vanhove’s Economics of Tour-
ism Destinations, Candela and Figini’s Economics of Tourism Destinations (same
title), and Tisdell’s Handbook of Tourism Economics provided a strong foundation
for the expanded exposition here.
In addition, the book has substantially benefited from data made available by the
various industry trade groups including the Airline Transport Associations (ATA
and IATA) and the International Civil Aviation Organization (ICAO). Similar
benefit was derived from data of the Cruise Lines International Association
(CLIA), the United Nations World Tourism Organization (WTO), and the Interna-
tional Association of Amusement Parks and Attractions (IAAPA).
For the previous first edition, I thank Michael Lenz, Director of Investor
Relations at American Airlines, for taking time to review a draft of the airline
chapter, and Erin Williams, Manager of Investor Relations at Royal Caribbean, for
reviewing the cruise ship section. Thanks similarly to Laura Paugh, Vice President
for Investor Relations at Marriott International, for reviewing the hotel chapter. I
am further indebted to Bobby Bowers of Smith Travel Research (STR) who kindly
guided my quest for essential aggregate hotel industry data. And additional
acknowledgments are due to Vance Gulliksen, Head of Public Relations at Carnival
Cruise, to Ryan Wahlstrom of cruisemarketwatch.com, and to Robert Mandelbaum
of PKF Hospitality Research.
This project and several earlier ones also benefited enormously from the support
of Scott Parris, former longtime economics editor at Cambridge University Press,
and, for this edition, from Christian Rauscher of Springer.
Even with such impressive backup, however, the responsibility for any errors
that may inadvertently remain is mine alone.
In all, I hope and expect that readers will find Travel Industry Economics to be a
truly enjoyable and moving experience. As Danish storyteller Hans Christian
Andersen wrote, “to travel is to live.”
All aboard!
New York City Harold L. Vogel

March 2016
Contents
Part I Introduction
1 Economic Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Time Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.1 Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.2 Availabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Supply and Demand Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.1 Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.2 Demand for Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.2.3 Expected Utility Comparisons . . . . . . . . . . . . . . . . . . . . 14
1.2.4 Demographics and Debts . . . . . . . . . . . . . . . . . . . . . . . . 15
1.2.5 Barriers to Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.3 Primary Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.3.1 Marginal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.3.2 Price Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
1.3.3 Public-Good Characteristics . . . . . . . . . . . . . . . . . . . . . . 23
1.3.4 Power Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.4 Personal-Consumption Expenditure Relationships . . . . . . . . . . . 25
1.5 Price Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.6 Industry Structures and Segments . . . . . . . . . . . . . . . . . . . . . . . 31
1.6.1 Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
1.6.2 Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1.6.3 Advertising and Promotion . . . . . . . . . . . . . . . . . . . . . . . 37
1.7 Valuation Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
1.7.1 Discounted Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 38
1.7.2 Comparison Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
1.7.3 Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1.8 Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1.9 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
xi
xii Contents
Part II Getting There

2 Wings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.1 Onward and Upward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.1.1 Technology and Early History . . . . . . . . . . . . . . . . . . . . 48
2.1.2 Regulation and Deregulation . . . . . . . . . . . . . . . . . . . . . 52
2.2 Operational Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.2.1 Structural Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.2.2 Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
2.2.3 Marketing Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
2.2.4 Airport Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
2.3 Economic Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
2.3.1 Macroeconomic Sensitivities . . . . . . . . . . . . . . . . . . . . . 74
2.3.2 Microeconomic Matters . . . . . . . . . . . . . . . . . . . . . . . . . 75
2.3.3 Financial Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
2.4 Financing and Accounting Issues . . . . . . . . . . . . . . . . . . . . . . . . 101
2.4.1 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
2.4.2 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
2.5 Valuing Airline Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
3 Water and Wheels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
3.1 Wetting the Whistle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
3.1.1 Fantasy Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
3.1.2 Operational Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
3.1.3 Economic Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
3.2 Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
3.2.1 Jamming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
3.2.2 Car Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
3.3 Kings of the Road . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
3.4 Iron and Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
3.5 Finance and Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Part III Being There

4 Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
4.1 Rooms at the Inn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
4.2 Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
4.2.1 Structural Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
4.2.2 Operating Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
4.2.3 Marketing Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
4.3 Financial and Economic Aspects . . . . . . . . . . . . . . . . . . . . . . . . 165
4.3.1 Financing Frameworks . . . . . . . . . . . . . . . . . . . . . . . . . . 165
4.3.2 Accounting Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
4.3.3 Economic Sensitivities . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Contents xiii
4.4 Valuing Hotel Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Part IV Doing Things There

5 Casinos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
5.1 From Ancient History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
5.1.1 At First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
5.1.2 Gaming in America . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
5.1.3 Asia’s Jackpot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
5.2 Money Talks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
5.2.1 Macroeconomic Matters . . . . . . . . . . . . . . . . . . . . . . . . . 197
5.2.2 Funding Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
5.2.3 Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
5.2.4 Financial Performance and Valuation . . . . . . . . . . . . . . . 202
5.3 Underlying Profit Principles and Terminology . . . . . . . . . . . . . . 203
5.3.1 Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
5.3.2 Terminology and Performance Standards . . . . . . . . . . . . 205
5.4 Casino Management and Accounting Policies . . . . . . . . . . . . . . 210
5.4.1 Marketing Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
5.4.2 Cash and Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
5.4.3 Procedural Paradigms . . . . . . . . . . . . . . . . . . . . . . . . . . 214
5.5 Gambling and Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
6 Amusement/Theme Parks and Resorts . . . . . . . . . . . . . . . . . . . . . . 219
6.1 Flower Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
6.1.1 Gardens and Groves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
6.1.2 Modern Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
6.2 Financial Operating Characteristics . . . . . . . . . . . . . . . . . . . . . . 222
6.3 Recreational Resorts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
6.4 Economic Sensitivities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
6.5 Valuing Theme-Park Properties . . . . . . . . . . . . . . . . . . . . . . . . . 229
7 Tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
7.1 Don’t Leave Home Without It . . . . . . . . . . . . . . . . . . . . . . . . . . 234
7.2 Economic Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
7.2.1 Demand Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
7.2.2 Multipliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
7.2.3 Balance of Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
7.2.4 Input–Output Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 253
xiv Contents
Part V Roundup
8 Performance and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
8.1 Common Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
8.2 Public Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
8.3 Guidelines for Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
8.4 Final Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264
Appendix A: Sources of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
Appendix B: Valuation Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
Appendix C: Major Games of Chance and Slots . . . . . . . . . . . . . . . . . . 271
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335
Part I
Introduction
Chapter 1
Economic Perspectives
Travel broadens the mind.—Proverb, early twentieth century
It also costs money and takes up time.

This chapter examines the fundamental economic factors that affect all aspects
of the travel and tourism business. The perspectives provided by this approach will
provide a framework for understanding how travel industries are defined and fit into
the larger economic picture and will also highlight the financial features that guide
investments in this field.
1.1 Time Concepts
1.1.1 Alternatives
You need time to get from here to there. And given that time-transport machines are
still to be seen only in science fiction films, it is worth spending a little time to
understand the economic value of time.
Time for leisure or business travel comes out of a budget that includes time for
work, time for play, and time for taking care of the necessities of life. In recent
years, however, the boundaries between these categories have become increasingly
blurred. For instance, what is loosely known as “leisure time” is widely considered
as being time in which people are free from having any sense of obligation or
compulsion to do anything.1 And the term leisure might as easily be characterized
1
De Grazia (1962, p. 13) notes that it is obvious that “time on one’s hands is not enough to make
leisure,” and free time accompanied by fear and anxiety is not leisure. As Torkildsen (1999, p. 93)
also notes, the concept of leisure can also be defined as an activity, experience, state of being, a
way of life, and so on, and it can encompass play and recreation activity. Kaplan (1960) defines
leisure as a composite that includes creation of pleasant expectations and recollections, requires
minimal social-role obligations, involves a psychological perception of free, and is often charac-
terized by play. See also Henig (2008), Pieper (2009), Rojek (2010), and Surdam (2015).
© Springer International Publishing Switzerland 2016 3

H.L. Vogel, Travel Industry Economics, DOI 10.1007/978-3-319-27475-1_1
4 1 Economic Perspectives
as time not spent at work. Yet no matter what the definitional preference, the
essential economic fact is that time has a cost in terms of alternative opportunities
foregone.
Because time is needed to use or to consume goods and services, as well as to
produce them, economists have attempted to develop theories that treat time as a
commodity with varying qualitative and quantitative cost features. As Sharp (1981)
notes in his comprehensive book,
Although time is commonly described as a scarce resource in economic literature, it is still
often treated rather differently from the more familiar inputs of labor and materials and
outputs of goods and services. The problems of its allocation have not yet been fully or
consistently integrated into economic analysis. (p. 210)
Nevertheless, investigations into the economics of time, including those of

Becker (1965) and DeSerpa (1971), have suggested that the demand for leisure is
affected in a complicated way by the consumption-cost of time. For instance,
according to Becker (1965) [see also Ghez and Becker (1975)]:
The two determinants of the importance of forgone earnings are the amount of time used
per dollar of goods and the cost per unit of time. Reading a book, taking a haircut or
commuting use more time per dollar of goods than eating dinner, frequenting a night-club
or sending children to private summer camps. Other things the same, foregone earnings
would be more important for the former set of commodities than the latter.
The importance of forgone earnings would be determined solely by time intensity only
if the cost of time was the same for all commodities. Presumably, however, it varies
considerably among commodities and at different periods. For example, the cost of time
is often less on weekends and in the evenings. (Becker 1965, p. 503)
1.1.2 Availabilities
Most of us are not normally subject to sharp changes in our availability of leisure
time (except on retirement or loss of job). Nevertheless, there is a fairly widespread
impression that leisure time has been trending steadily higher ever since the
Industrial Revolution of more than a century ago. Yet the evidence on this is
mixed. Figure 1.1 shows that in the United States the largest increases in leisure
time—workweek reductions—for agricultural and nonagricultural industries were
achieved prior to 1940. But more recently, the lengths of average workweeks
adjusted for increases in holidays and vacations have scarcely changed for the
manufacturing sector and have also stopped declining in the services sector
(Table 1.1, Fig. 1.2). By comparison, average hours worked in other major coun-
tries, as illustrated in Fig. 1.3, have declined markedly since 1970.2
2
Annual vacation and holiday time also varies greatly. For example, in the late 1990s, the number
of days off in the United States averaged 25; in Canada, 29; in Germany, 40; and in Japan, 44. See
Grimsley (1998) and Landler (2004).
1.1 Time Concepts 5
Average Weekly Hours Average Weekly Hours

75 75
70 70
65 65
Agriculture
60 60
55 55
50 50
ALL
INDUSTRIES
45 45
40 40
Nonagriculture
35 35
0 0
1850 '60 '70 '80 '90 1900 '10 '20 '30 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50 '51 '52 '53 '54 '55 1956
Fig. 1.1 Estimated average weekly hours for all persons employed in agricultural and
nonagricultural industries, 1850–1940 (10-year intervals) and 1941–1956 (annual averages for
all employed persons, including the self-employed and unpaid family workers). Source: Zeisel
(1958)
Table 1.1 Average weekly Average hours at work Median hours at work
hours at work, 1948–2013a
Year Unadjusted Adjustedb Year Hours
and median weekly hours at
work for selected years 1948 42.7 41.6 1975 43.1
1956 43.0 41.8 1980 46.9
1962 43.1 41.7 1987 46.8
1969 43.5 42.0 1995 50.6
1975 42.2 40.9 2004 50.0
1986 42.8 2008 46.0
2013 50.0c
Source: Harris (1995), http://www.harrisinteractive.com/
Insights/HarrisVault.aspx for median hours worked
a
Nonstudent men in nonagricultural industries. Source: Owen
(1976, 1988)
b
Adjusted for growth in vacations and holidays
c
For households with children
Although this suggests that there has been little, if any, expansion of leisure time
in the United States, what has apparently happened instead is that work schedules
now provide greater diversity. As noted by Smith (1986), “A larger percentage of
people worked under 35 hours or over 49 hours a week in 1985 than in 1973, yet the
Fig. 1.2 Average weekly

Weekly hours
hours worked by production
workers in manufacturing and 43
services, 1965–2014. Source:
U.S. Department of
Commerce 40
Manufacturing
37
34 Services
31
65 75 85 95 05 15
mean and median hours (38.4 and 40.4 respectively, in 1985) remained virtually
unchanged.”3
If findings from public-opinion surveys on Americans and the arts are to be
believed, the number of hours available for leisure may actually at best be holding
steady.4 Schor (1991, p. 29), however, says that between 1969 and 1987, “the
average employed person is now on the job an additional 163 h, or the equivalent of
an extra month a year . . . and that hours have risen across a wide spectrum of
Americans and in all income categories.”5
3
As Smith (1986, p. 8) has further noted, surveys indicate that for full-time, day-shift plant
workers, the average workweek decreased by 0.8 h between 1973 and 1985 but that over the
same period, “the schedule of full-time office workers in the private sector rose by 0.2 hour, with
the result that the workweek of these two large groups converged markedly.”
Hedges and Taylor (1980) show that hours for full-time service workers declined faster than for
white-collar and blue-collar employees between 1968 and 1979. In addition, the Bureau of Labor
Statistics estimated that the percentage of nonagricultural salaried jobs in which the workweek
exceeded 49 h rose to 18.5 % in 1993 as compared to 14.2 % in 1973. Through World War I
Americans regularly worked 6 days a week and it was not until after passage of the Fair Labor
Standards Act in 1938 that overtime pay and a 40-h workweek became the norm.
4
The Harris nationwide cross-section sample survey of 1501 adults found that the estimated hours
available for leisure have been steadily decreasing from 26.2 h per week in 1973 to 16.6 h per week
in 1987. Since 1989 this has stabilized at around 20 h. Harris argues that an apparent combination
of economic necessities and choices by women who want to work has increased the number of
families in which both husbands and wives hold jobs. Also see Gibbs (1989).
5
These estimated changes in hours worked appear strikingly high. It seems that, although the
analysis could have been correct in catching the direction of change, it might have mistakenly
estimated its magnitude. Schor’s book is so politically imbued with an anticapitalist theme that the
methodology and the objectivity of its findings are suspect. See also Robinson and Godbey (1997)
and The Economist, December 23, 1995, p. 12. Effects on work hours during the 2007–2009
recession are discussed in Kroll (2011).
1.1 Time Concepts 7
Fig. 1.3 Average annual

hours worked in the United 2,300
States versus other
countries, 1970–2014. Japan
2,050
Source: OECD
Employment Outlook U.S.
1,800
France U.K.
1,550
Germany
1,300
70 80 90 00 10
Table 1.2 Aggregate weekly hours worked per person (+15), 1950–2000
Average weekly hours worked
Year Per person Per worker Employment-to population ratio (%)
1950 22.34 42.40 52.69
1960 21.55 40.24 53.55
1970 21.15 38.83 54.47
1980 22.07 39.01 56.59
1990 23.86 39.74 60.04
2000 23.94 40.46 59.17
% Change, 1950–2000 7.18 4.56 12.30
Source: McGrattan and Rogerson (2004), U.S. Dept. of Commerce, Bureau of the Census
Aguiar and Hurst (2006) argue the opposite. And as shown in Table 1.2,
McGrattan and Rogerson (2004) find that since World War II, the number of
weekly hours of market work in the United States has remained roughly constant,
even though there have been dramatic shifts in various subgroups.
Robinson (1989, p. 34) also measured free time by age categories and found that
“most gains in free time have occurred between 1965 and 1975 [but] since then, the
amount of free time people have has remained fairly stable.” By adjusting for age
categories, the case for an increase in total leisure hours available becomes much
more persuasive.6
In addition, Roberts and Rupert (1995) found that total hours of annual work
have not changed by much but that the composition of labor has shifted from home
work to market work with nearly all the difference attributable to changes in the
6
Robinson (1989, p. 35) found, for example, that “people aged 51 to 64 have gained the most free
time since 1965, mainly because they are working less. Among people in this age group, the
proportion of men opting for early retirement increased considerably between 1965 and 1985.”
Also, Robinson and Godbey (1997) suggest that Americans, in the aggregate, have more time for
leisure because of broad trends toward younger retirements and smaller families. Except for
parents of young children, or those with more than four children under age 18, everyone else,
they say, has gained at least 1 h per week since 1965.
total hours worked by women.7 A similar conclusion as to average annual hours

worked was also reached by Rones et al. (1997).8 Yet, according to Jacobs and
Gerson (1998, p. 457), “even though the average work week has not changed
dramatically in the US over the last several decades, a growing group of Americans
are clearly and strongly pressed for time.” And this fully reflects the income-time
paradox wherein the young and elderly have lots of time but relatively little income
available as compared to the middle-aged, who have income but no time.
In all, it seems safe to say that for most middle-aged and middle-income
Americans—and recently for Europeans too—leisure time is not expanding.9
Indeed, the comprehensive compilation of research by Ramey and Francis (2009)
suggests that “per capita leisure and average annual lifetime leisure increased by
only four or five hours per week during the last 100 years. . .leisure has increased by
10 percent since 1900.”
Still, whatever the actual rate of expansion or contraction may be, there has been
a natural evolution toward repackaging the time set aside for leisure into longer
holiday weekends and extra vacation days rather than in reducing the minutes
worked each and every week.10 And this is all advantageous to the travel business.
Particularly for those in the higher-income categories—conspicuous consumers,
as Veblen (1899) would say—the result is that personal-consumption expenditures
(PCEs) for leisure activities (including those for tourism and travel) are likely to be
intense, frenzied, and compressed instead of evenly metered throughout the year. In
Veblen’s view, leisure was a symbol of social class, with status emulation as a
7
Roberts and Rupert (1995) state that the presumption of declining leisure is a fallacy. “Previous
studies purporting to have uncovered such a fact have not adequately disentangled time spent in
home production-activities . . . from time spent enjoying leisure activities. [W]hile hours of market
work and home work have remained fairly constant for men since the mid-1970s, market hours
have been rising and home production hours have been declining for women . . . Possible reasons
include an increase in market versus nonmarket productivity or labor-saving technological
advancements in the home.”
8
Rones et al. (1997) concluded that, between 1976 and 1993, “after removing the effect of the
shifting age distribution, average weekly hours for men showed virtually no change (edging up
from 41.0 to 41.2 hours), and the average workweek for women increased by only a single hour
[but] . . . a growing proportion of workers are putting in very long workweeks . . . This increase is
pervasive across occupations, and the long workweek itself seems to be associated with high
earnings and certain types of occupations.” Note that the U.S. Federal Government approved
funding in December 2000 for an American Time Use Survey of Activity. See Shelley (2005).
9
Divergence of results in studying hours of work may be caused by differences in how government
data are used. For example, such data generally are based on hours paid rather than hours worked.
This means that a worker on paid vacation would be counted as working, even though he or she
was not. Also, hours per job, rather than hours per worker are used. The shift in work-hour trends in
Europe is a function of competition from low-wage countries and is discussed in Landler (2004).
10
Rybczynski (1991) provides a detailed history of the evolution of the weekend, and Spring
(1993) provides a study of the popularity of spare-time activities classified by day of the week.
Television viewing, consuming one-third of free time on weekdays and one-fourth on weekends,
leads the list by far on every day of the week. Veal (2007) provides a broad survey of the
economics of leisure and Cameron et al. (2011) collects studies on the economics of leisure. A
history of leisure time, spending preferences, and elasticities for 1890–1940 appear in
Bakker (2011).
1.1 Time Concepts 9
Table 1.3 Time spent by US adults on selected leisure activities, 1970 and 2013 estimates
Hours per person per % of total time accounted for by each
yeara activity
Leisure activity 1970 2013 1970 2013
Television 1,226 1,771 46.5 40.7
Network affiliates 606 13.9
Independent stations 6 0.1
Basic cable programs 1,086 25.0
Pay cable programs 73 1.7
Radio 872 824 33.1 19.0
Home 254 6.1
Out of home 560 12.9
Internetb 1,210 27.8
Newspapersc 218 86 8.3 2.0
Recorded musicd 68 137 2.6 3.2
Magazines 170 60 6.5 1.4
Leisure bookse 65 74 2.5 1.7
Movies: theaters 10 10 0.4 0.2
Home video 31 0.7
Spectator sports 3 18 0.1 0.4
Video games: home 121 2.8
Cultural events 3 6 0.1 0.1
Total 2,635 4,348 100.0 100.0f
Hours per adult per week 50.7 83.6
Hours per adult per day 7.2 11.9
a
Averaged over participants and nonparticipants
b
Includes mobile access
c
Includes free dailies
d
Includes licensed digital music
e
Includes electronic books
f
Totals not exact because of rounding
Sources: CBS Office of Economic Analysis and Wilkofsky Gruen Associates, Inc.
driver of demand. And this is as valid an observation today as it was in Veblen’s

time: Even allowing for cultural differences, wherever large middle-class
populations emerge, status emulation will drive demand for the type of conspicuous
consumption that is well represented by travel and tourism.
Estimated apportionment of leisure hours among various activities, and the
changes in such apportionments between 1970 and 2013, are indicated in
Table 1.3.11 In addition, many of the time and cost concepts that apply specifically
11
In addition, studies comparing time allocation in different countries can be found in Juster and
Stafford (1991), where, for example, it can be seen that both men and women allocate more time to
leisure in the United States than in Japan or Sweden. Bell and Freeman (2000), however, explain that
the differences in hours worked in different countries are related less to cultural values than to a
greater diversity of wages, the effects of number of hours worked on future compensation, and less
job security in the United States than elsewhere. They find that an American working 2000 h per year
who increases that by 10 % to 2200 h can generally expect a “1 percent increase in future wages.”
Fig. 1.4 Distance-decay

Frequency of
function for tourist travel tourist demand
weekend trip
2-week trip
Time/cost of
travel
to travel and tourism can be tied together in what has been dubbed a distance-decay
function as shown in Fig. 1.4. The function captures the fact that while traveling, an
opportunity cost of time rather spent doing something else is incurred. As Bull
(1995, p. 45) suggests, a proxy for physical distance is a composite variable that
includes the opportunity cost of time and of the money cost for a trip. Such a
variable is inversely related to demand for tourist travel.
More broadly, it can also be understood that “[T]ransportation is a friction—a
cost in both money and time—that must be incurred by individuals and firms to
complete almost any market transaction . An efficient and extensive transportation
system greatly enriches the standard of living in modern society by reducing the
cost of nearly everything. . .”12
1.2 Supply and Demand Factors
1.2.1 Productivity
Ultimately, more leisure time availability is not a function of government decrees,

labor union activity, or factory owner altruism. It is a function of the rising trend in
output per person-hour—in brief, the rising productivity of the economy. Quite
simply, technological advances embodied in new capital equipment and in the training
of a more skilled labor pool allow more goods and services to be produced in less time
or by fewer workers. Long-term growth in leisure-related and travel industries thus
depends on the rate of technological development throughout a nation’s economy.
Information concerning trends in productivity, as well as other aspects of
economic activity, may be derived from the National Income and Product
12
The quote is from Winston (2013). Economists such as Hensher (2013) have also studied what is
known as valuation of travel time savings.
1.2 Supply and Demand Factors 11
% change
3.0
2.8
2.8
2.6
2.5
2.2
2.3
2.0
1.8
1.5
1.5 1.4
1.2
1.3
1.0
1947-73 1973-79 1979-90 1990-'00 2000-07 2007-14
Fig. 1.5 Average annual percent change in nonfarm business productivity in the United States,
1947–2014, selected periods. Source: U.S. Department of Labor and St. Louis Federal Reserve
Bank FRED, available at stlouisfed.org
Accounting (NIPA) figures and data from the Bureau of Labor Statistics. From
these sources it can be seen (Fig. 1.5) that overall productivity between 1979 and
1990 rose at an average annual rate of approximately 1.5 %, then jumped to a rate of
2.6 % between 2000 and 2007 before falling back to a rate of 1.4 % between 2007
and 2014.
This suggests that the potential for leisure-time expansion remained fairly steady
in the last quarter of the twentieth century and into the early 2000s. Meanwhile, the
gap between European and US labor productivity had continued to narrow until
around 1995.13
13
The apparently reduced rate of improvement between 1973 and 1990 may have been caused by
unexpected sharp cost increases for energy and capital (interest rates), by high corporate debt
levels, or perhaps by the burgeoning “underground” (off-the-books) economy not directly reflected
in (and therefore distorting) the NIPA numbers. As McTague (2005) suggests, growth of the
underground economy still creates important distortions, especially in the measurement of pro-
ductivity. McKinsey Global Institute (2010) speculates that the gap in European productivity is a
result of a greater preference for leisure time and also relative underperformance of service sectors.
As of 2010, the per capita gross domestic product (GDP) gap was estimated to be $11,250.
1.2.2 Demand for Leisure
All of us can choose either to fully use our free time for recreational purposes
(defined here as being inclusive of entertainment and leisure-travel activities) or to
use some of this time to generate additional income. How we allocate free time
between the conflicting desires for more leisure and for additional income then
becomes a subject that economists investigate with standard analytical tools.14 In
effect, economists can treat demand for leisure as if it were, say, demand for gold,
or for wheat, or for housing. And they often estimate and depict the schedules for
supply and demand with curves of the type shown in Fig. 1.6. Here, in simplified
form, it can be seen that, as the price of a unit rises, the supply of it will normally
increase and the demand for it decrease so that, over time, price and quantity
equilibrium in an openly competitive market will be achieved at the intersection
of the curves.15
Consumers typically tend to substitute less expensive close-equivalent goods
and services for more expensive ones and the total amounts they can spend—their
budgets—are limited or constrained by income. The effects of such substitutions
and changes in income as related to demand for leisure have been extensively
studied by Owen (1970), who observed:
An increase in property income will, if we assume leisure is a superior good, reduce hours
of work. A higher wage rate also brings higher income which, in itself, may incline the
individual to increase his leisure. But at the same time the higher wage rate makes leisure
time more expensive in terms of forgone goods and services, so that the individual may
decide instead to purchase less leisure. The net effect will depend then on the relative
strengths of the income and price elasticities . . . It would seem that for the average worker
the income effect of a rise in the wage rate is in fact stronger than the substitution effect.
(p. 18)
In other words, as wage rates continue to rise up to point A in Fig. 1.7, people
will choose to work more hours to increase their income (income effect). Eventu-
ally, however, they will begin to favor more leisure over more income (substitution
effect, between points A and B), resulting in a backward-bending labor-supply
14
There are many fine texts providing full description of these tools.
15
In most mathematical presentations, the independent variable or the “cause” of change is
presented along the horizontal x-axis and the dependent variable on the vertical y-axis. Econo-
mists, however, have generally found it more convenient to depict prices (the independent
variable) and quantities by switching the axes. Thus, prices are usually seen on the vertical axis
and quantities on the horizontal one. Werner (2005, p. 326) importantly notes that “the variable
that produces the equilibrium in this model is price. However, to achieve this outcome, perfect
information is required. If there is imperfect information, there is no guarantee that equilibrium
will ever be obtained. It would be pure chance if demand equaled supply.”
Fig. 1.6 Supply and

demand schedules P
$7
6 Demand
Price (P) per unit

5
4 Supply
3
2
1
0 Q
1 2 3 4 5 6 7 8 9 10 11 12
Quantity (Q) of units per time
Fig. 1.7 Backward- Wage

bending labor-supply curve Rate
B o
o A
Hours Worked
curve.16 And the net (of taxes) hourly wage thus becomes the opportunity cost of an
hour of leisure!
Although renowned economists, including Adam Smith, Alfred Marshall, Frank
Knight, A. C. Pigou, and Lionel Robbins, have substantially differed in their
16
In Linder (1970), standard indifference-curve/budget-line analysis is used to show how the
supply of labor is a function of income and substitution effects. The standard consumers’ utility
function is V ¼ f(Q, Tc), where Q is the number of units of consumption goods, and Tc is the
number of hours devoted to consumption purposes. Two constraints are Q ¼ pTw, and T ¼ Tw + Tc,
where p is a productivity index measuring the number of consumption goods earned per hour of
work (Tw), and T is the total number of hours available per time period.
To maximize utility, V now takes the Lagrange multiplier function:
L¼ f ðQ, T c Þ þ λ½Q pðT T c Þ;
which is then differentiated with respect to Q, Tc, and the multiplier λ.

assessments of the net effect of wage-rate changes on the demand for leisure, it is
clear that “leisure does have a price, and changes in its price will affect the demand
for it” (Owen 1970, p. 19). Results from a Bureau of Labor Statistics survey of some
60,000 households in 1986 indeed suggest that about two-thirds of those surveyed
did not want to work fewer hours if it means earning less money.17
As Owen (1970) has demonstrated, estimation of the demand for leisure requires
consideration of many complex issues, including the nature of “working condi-
tions,” the effects of increasing worker fatigue on production rates as work hours
lengthen, the greater availability of educational opportunities that affect the desir-
ability of certain kinds of work, government taxation and spending policies, and
market unemployment rates.18
1.2.3 Expected Utility Comparisons
Individuals differ in terms of emotional gratification derived from consumption of

different goods and services. It is thus difficult to measure and compare the degrees
of satisfaction derived from, say, eating dinner as opposed to buying a new car. To
facilitate comparability, economists have adapted an old philosophical concept
known as utility (which is essentially pleasure).19 Utility “is not a measure of
usefulness or need but a measure of the desirability of a commodity from the
psychological viewpoint of the consumer.”20 It is often the consumption charac-
teristics and qualities associated with goods rather than the possession of goods
themselves that matters most.
Rational individuals try to maximize utility—in other words, make decisions
that provide them with the most satisfaction. But they are hampered in this regard
because decisions are typically made under conditions of uncertainty, with incom-
plete information, and therefore with the risk of an undesired outcome. People thus
tend implicitly to include a probabilistic component in their decision-making
processes—and they end up maximizing expected utility rather than utility itself.
17
See Trost (1986) and Monthly Labor Review, U.S. Department of Commerce, Bureau of Labor
Statistics, November 1986, No. 11, November 1986.
18
Owen’s (1970) exhaustive study of these issues leads to a model supporting the hypothesis of a
backward-bending labor-supply curve and suggesting that demand for leisure activity has positive
income and negative price elasticities, consistent with economic theory.
19
Utility can often be visualized in the form of a mathematical curve or function. For instance, the
utility a person derives from the purchase of good x might vary with the square root of the amount
of x ( i.e., U(x) ¼ square root of x). See Levy and Sarnat (1972).
20
The quotation is from Barrett (1974, p. 79). Taking this a step further, one finds that a marginal
rate of substitution (MRS) between good x and good y can then be presented in the form of
indifference curves that are a ratio of the marginal utility (MU) of x to the marginal utility of y, and
along which utility is constant. The underlying assumption is that of diminishing marginal utility,
which means that the curves never intersect and are negatively sloped and generally convex to the
origin.
The notion of expected utility is especially well applied to thinking about demand
for travel goods and services. It explains, for example, why people may be attracted to
gambling or why they are sometimes willing to pay premiums for certain hotel and
restaurant accommodations. Expected utility also sheds light on how various travel
and entertainment activities compete for the limited time and funds of consumers.
To illustrate, assume for a moment that the cost of an activity per unit of time is
somewhat representative of its expected utility. If the admission price to a 2-h
movie is $12, and if the purchase of video-game software for $25 provides 6 h of
play before the onset of boredom, then the cost per minute for the movie is 10 cents
whereas that for the game is 6.9 cents.
Now, obviously, no one decides to see a movie or buy a game on the basis of
explicit comparisons of cost per minute. And for an individual, many qualitative
(nonmonetary) factors, especially fashions and fads, may affect the perception of an
item’s expected utility. However, in the aggregate and over time, such implicit
comparisons do have a significant cumulative influence on relative demand for
travel (and other) products and services. In the case of the distance-decay function
of Fig. 1.4, for example, expected utility thinking is what makes travelers behave as
they do in terms of balancing the opportunity cost of time and money (distance)
against frequency of travel.
Finally, it is helpful to view travel service companies as being in the business of
supplying customers with “experiences” as channeled through entertainment, edu-
cational, aesthetic, and escapist activities.21 Especially in travel, such experiences
have deep-seated and long-lasting effects on emotions and psychology.22 People, it
seems, are often happier after purchasing experiences (like those related to travel)
than material goods.
1.2.4 Demographics and Debts
Over the longer term, the demand for leisure goods and services can also be
significantly affected by changes in the relative growth of different age cohorts.
Teenagers, for example, tend to be important purchasers of recorded music; people
under the age of 30 are the most avid moviegoers. A large increase in births
following World War II accordingly created, in the 1960s and 1970s, a market
21
This first appeared in Pine and Gilmore (1998, p. 102) in the form of a circle divided into four
parts or “realms” rotating clockwise from entertainment (upper left) to educational, esthetic, and
escapist and centered on a vertical axis ranging (top to bottom) from absorption to immersion and a
horizontal axis ranging (left to right) from passive to active participation.
22
See Van Boven and Gilovich (2003) and Carter and Gilovich (2010), and Blackman (2014).
Lancaster (1966, 1971) developed the consumption characteristics approach. Pine and Gilmore
(1998) first wrote about the experience economy and explain that “experiences are a distinct
economic offering, as different from services as services are from goods. . . An experience occurs
when a company intentionally uses services as the stage, and goods as props, to engage individual
customers in a way that creates a memorable event.” Scitovsky (1976) wrote on the psychology of
happiness and satisfaction.
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for more than a thousand years, Arabia lay contained within herself,
dammed perhaps by the Persian, Macedonian, Parthian, and Roman
empires, until in the seventh century after Christ Mohammedanism
led forth her peoples. A much earlier movement, at an unknown
time, had brought the forefathers of the Abyssinians across the
mouth of the Red Sea into Africa, and the Hyksos who overthrew the
Middle Kingdom of ancient Egypt may have been Semites.
The Indo-Europeans entered southwest Asia later and permeated
it more locally than the Semites. Soon after 2000 the Kassites or
Kossæans intruded into Babylonia; they seem to have been Indo-
Europeans, perhaps Iranians. Around 1500 the Mitanni were a
power on the upper Euphrates between the Assyrians and the
Hittites of Asia Minor. Their personal and god names as preserved in
Assyrian Cuneiform inscriptions show them to have been an Iranian
people. The latter are not recognizably referred to in their permanent
home on the Iranian plateau until about 1000, but may well have
settled there a thousand years earlier. Their close relatives, the Indic
branch, are believed to have begun their entry of India about 2000-
1500 B.C. or soon after.
245. Iranian Peoples and Cultures

By the seventh century B.C., the Iranians were civilized and strong
enough to participate in the overthrow of Semitic Assyria, whose
principal inheritors they became. From then on for over twelve
hundred years, with only a century of interruption due to Alexander
and his successors, a succession of Iranian powers dominated not
only the plateau but Babylonia and Mesopotamia: Medes,
Achæmenian Persians, Parthians, Sassanian Persians. A strong
national consciousness was evolved and reinforced by a national
religion—Zoroastrianism, Magism, Fire-worship, the Avestan faith,
are some of its names. This Iranian religion endured nearly three
thousand years, and still survives among a shrunken number of
followers, notably the emigrant Parsis—that is, “Persians”—of India;
and its basic ideas of the eternal conflict of good and evil, truth and
lie, and of a single supreme deity of righteousness, have influenced
many other cults, including Christianity. The long contact between
Iran and the Tigris-Euphrates valley and their frequent political unity
since 600 B.C. reacted favorably to the intensification of culture in
the highlands; with the result that when the Arabs and later the Turks
broke from their marginal homes into the old civilized parts of
western Asia, they absorbed heavily from the long established
cultures of Iran. Much of Arab and Turkish civilization is really
Persian, and goes back ultimately to Semitic Babylonian and
Sumerian origins.
Soon after the Iranians pushed southward out of the steppe on to
the plateau east of the Caspian, other Indo-Europeans drove
southward west of the Caspian and Black Sea; the Armenians into
the seats which they have held ever since, the Kardouchoi into the
Kurd country, tribes allied to the Balkan Thracians and the Phrygians
into Asia Minor. The centuries before and after 1000 B.C. were the
period of these movements, all of which failed to penetrate as deeply
into the heart of the west Asiatic cultural center as had the Semitic
inflows. Nor was the Indo-Europeanization of all the newly occupied
territories as permanent as the corresponding Semitization. Asia
Minor, which is now prevailingly Turkish, is the one area of
consequence that in the historic period has been de-Indo-
Europeanized in speech (§ 50).
246. The Composite Culture of the Near East

In this western end of Asia, then, from the Hellespont to Persia
and from the Caucasus to the Arabian desert, beginning five
thousand years ago and probably more, a motley of nations was
thrown together—autochthonous peoples of several sorts, Semites,
Indo-Europeans, possibly Ural-Altaians. Their contacts enabled each
to acquire many of the new devices developed by the others, to
combine these with their own attainments, and thus to be a source of
culture stimulation over again for the others. The largest tract of rich
lowland in the area was the Fertile Crescent which bowed from
Jerusalem northward and eastward into Mesopotamia and then
down the course of the Tigris and Euphrates to their mouths, and
here, for several millenia, civilization tended to advance most
intensively. Within this Crescent, again, its southeastern end, the
drainable and irrigable alluvial plain of Babylonia, averaged in the
lead from the earliest known Sumerian times until shortly before the
Christian era. Yet political dominance often shifted elsewhere: to
Egypt, which conquered to the Euphrates in the fifteenth century
B.C.; to the Hittites of Asia Minor in the fourteenth and thirteenth; to
the Assyrians of the middle Tigris in the twelfth and eleventh and
again in the eighth and seventh centuries. Culturally, too, almost
every one of the many nations or tracts comprised within the west
Asiatic area developed a degree of independence; each added
features or modified those which it borrowed; each gave to its local
civilization a cast of its own, without losing touch with the others.
247. Phœnicians, Aramæans, Hebrews

Thus, the Phœnicians, or some Semitic people closely related and
geographically near them, by 1000 B.C. developed, presumably out
of one of the several part-phonetic or syllabic writings in use about or
among them, the true alphabet (§ 134). In the two or three centuries
following, they established a commercial and maritime supremacy
over the Mediterranean that led to the founding of Carthage, direct
trade as far as Spain and indirect to Britain, and transmission of the
alphabet and other knowledge to the Greeks.
Another trading people, although an inland one, were the
Aramæans, Semites of the same wave as the Hebrews but
established north of Palestine in Syria, with Damascus as their
greatest center. Never more than a secondary political power, they
penetrated other countries peacefully, brought in their system of
measures and weights, their writing, and even their language.
Assyria had become half Aramaic speaking by the time of her fall,
and the every-day language of Palestine in the days of Jesus and for
some centuries before was Aramaic. Aramæan script, a cursive form
of the Phœnician alphabet, gradually replaced Cuneiform writing,
first for business and then for official purposes, throughout western
Asia and beyond. In the fourteenth century, the Syrian and
Palestinian city rulers had written their reports and dispatches to the
Egyptian overlord in Cuneiform, which a corps of clerks in the
Foreign Office or Dependencies Department at Tell-el-Amarna
transcribed into Hieroglyphic or Hieratic. In the fourth century,
Persian officials were employing Aramæan for official
communications. As the Cuneiform more and more died out,
derivatives of Aramæan became the alphabets of Persia; of at least
part and possibly the whole of India; of the Jews; of the Arabs; of the
Nestorian Christians; and of the ancient Turks, the Mongols, and the
Manchus. Practically all Asia except perhaps India, so far as it writes
alphabetically, thus derives its letters from an Aramæan source (§
146).
Equally profound was the influence of the neighboring Hebrews in
another phase of civilization. At the time they first entered history,
about 1400 B.C., the Hebrews worshiped a tribal god Jahveh. They
believed that there were many gods beside him, but that they were
his people and he their god. A growing national consciousness led
them more and more to emphasize the special relation between him
and them, to the exclusion of worship of other deities which was
constantly creeping in from their Canaanite, Phœnician, Aramæan,
and Egyptian neighbors. Thus they grew into the stage of monolatry,
or worship limited to one god. As however Assyria and Babylonia
first threatened and then engulfed them, and their national
impotence became more and more evident, they confided less in
themselves, as they had done in the brief days of their little tenth
century glory, and trusted increasingly in their god as their salvation.
National hopes fell and divine ones rose; until the Hebrew people
passed from thinking of the Lord as all powerful to thinking of him as
one and sole: monotheism had evolved out of monolatry as this had
grown out of a special tribal cult. Historically the monotheistic idea
was not new. Ikhnaton of Egypt had proclaimed it more than half a
thousand years before the Hebrew prophets. The concept may
actually have been carried over; but it certainly drew sustenance of
its own on Hebrew soil and first became established there as a
cardinal, enduring element of a national civilization. The Hebrews
adhered to monotheism with an ever-increasing insistence; until the
concept was taken over by Christianity and Islam—two of the three
great international religions; Buddhism, the third, being essentially
atheistic. Here then is another tremendously spread cultural element
of deep significance that originated as a local west Asiatic variant.
248. Other Contributing Nationalities

Almost every people in the area, in fact, made its special
contribution. In Asia Minor evolved the concept of a great primal
mother goddess, known to the Greeks as Cybele. Lydia, in western
Asia Minor, coined the earliest money about 700 B.C. Some people
near the Black Sea in eastern Asia Minor seem to have been the first
to develop the working of iron and perhaps of steel. The Kassites
from the north or east probably introduced the horse into Babylonia,
soon after 2000 B.C. Thence it spread, as the animal of royalty,
aristocracy, and the special arm of chariot warfare, until it reached
Egypt some three hundred years later. The first domestication of the
horse was apparently in central Asia; the transmission to Europe
may have been direct rather than through Mediterranean Asia. The
camel had been tamed earlier, also in central Asia. Its remains
appear in Turkistan in the copper period; and in Israel the Arab
Midianite raiders whom Gideon defeated rode camels, while some
generations later, in David’s time, about 1000 B.C., horses were still
scarce.
249. Ægean Civilization

On the island of Crete, almost equidistant from Asia, Africa, and
Europe, there began to grow up with the introduction of bronze,
about 3000 B.C., a civilization most of whose elements were
imported, but which added to them and molded the whole of its mass
with unusual originality. Three great periods, named the Early,
Middle, and Late “Minoan” after the legendary Cretan king Minos,
are distinguishable in the abundant remains which excavation has
brought to light; each of these is divisible into three sub-periods
designated I, II, III. At some sites, such as Knossos, the remains of
successive sub-periods are separated by layers of packed-down
earth deposited when an old settlement was obliterated and serving
as floor for the next occupation. Underneath the Bronze Age
deposits were thick strata from the Neolithic, with unpainted pottery.
With the Early Minoan, about 3000 B.C., painted pottery as well as
bronze came in, to be followed by the potter’s wheel and a system of
hieroglyphic writing unrelated to the Egyptian. In the Middle Minoan
the pottery became polychrome, palaces were built, art took a
remarkable naturalistic turn in pottery and fresco painting and
carving, and the hieroglyphics evolved into a linear, probably
syllabic, script. The beginning of the Late Minoan, from the sixteenth
to the fourteenth century B.C., saw the culmination of Cretan
civilization. Then something violent happened, the palaces were
destroyed, and after a brief decadence Minoan culture passed out at
the arrival of the first of the historic Greeks, at the opening of the Iron
Age, about 1250 B.C.
The Minoans left no chronology of their own and their writing is
unread. But datable Egyptian objects found in Cretan strata of
identified period, and Cretan objects characteristic of particular
periods found at datable Egyptian sites as the result of trade, have
made possible an indirect but positive chronology for Minoan culture.
The second sub-periods of Early, Middle, and Late Minoan
respectively were contemporary with the Sixth, Twelfth, and
Eighteenth Dynasties on the Nile. From 2000 B.C. on, Minoan dates
are therefore reliable within a century and sometimes less. Industry,
commerce, games, a light, practical style of architecture, above all a
graceful realistic art, flourished particularly from Middle Minoan III to
Late Minoan II. There was evidently considerable wealth, a leisure
class, and life was prevailingly peaceful and surrounded with charm.
The Minoans were a Caucasian people of Mediterranean race.
Their language is unknown, but seems to have been distinct from the
later Greek, and therefore probably non-Indo-European. When their
home power crumbled, a fragment appears to have taken refuge in
Asia and founded the Philistine cities which for a time pressed the
tribal Hebrews and which gave their name to Palestine.
A related culture appears in the ruins of the successive cities of
Troy; on the islands of the Ægean Sea; and in mainland Greece,
where it has been called Mycenæan, after the citadel and town
attributed to Agamemnon. Ægean perhaps is the name least likely to
confuse, for this larger culture of which the Cretan Minoan was long
the most illustrious representative. The table outlines the principal
correlations.
The thirteenth century brought the Greeks, then a rude, hardy, and
at first non-maritime people, fighting their way south and wrecking or
sapping the Ægean civilization. Culture lost its bloom, life became
hard, the outlook contracted. Art shriveled into crude geometric
ornamentation, the forms became childishly inept, intercourse with
the Orient sank to a minimum, and when trade and foreign
stimulation revived they were at first in Phœnician hands. It is not
until the seventh century that true history begins in Greece, and in
the main only to the sixth that the rudiments of that characteristic
Hellenic philosophy, literature, and art can be traced, which were
released after the Persian wars early in the fifth century. Yet the half
thousand and more years of dark ages between Ægean and classic
Greek civilization did not entail a complete interruption. The Greek
often enough smote the Mycenæan or Minoan. More often, perhaps,
he settled alongside him, possibly oppressed him, but learned from
him. He choked out Ægean culture, but nourished his own upon it.
The Homeric poems, composed in Greek during this period of
retrogression, picture a civilization essentially Ægean; and along with
them much other cultural tradition must have been passed on.
At any rate, when Greek culture reëmerged, it was charged with
Oriental elements and influences, but perhaps even more charged
with Ægean ones. Its games, its unponderous architecture, its open
city life, the free quality of its art, its political particularity, its peculiar
alert tenseness and feeling for grace, had all flourished before on
Greek soil. Their flavor is un-Asiatic and un-Egyptian of whatever
period. We have here another instance of the tenacity of the
attachment of cultural qualities to the soil; of the faculty, at once
absorptive and resistive, that for thousands of years, however
inventions might diffuse and culture elements circulate, succeeded in
keeping China something that can fairly be called Chinese, India
Indian, Egypt Egyptian, the Northwest and Southwest of America
Northwestern and Southwestern respectively; in a degree even kept
Europe, so long culturally dependent on the Orient, always
European.
250. Europe
With Greece we have entered the realm of what is conventionally
regarded as history. For the rest of Europe, prehistoric archæology
and its record of illiterate peoples abut so closely on history in the
ordinary sense, that a tracing of the transition takes one promptly
into documentary study. There is much in this early historical field
that is of anthropological interest, and just back of it lies more that is
specifically so: where the round headed peoples came from who
began to appear in Europe during the Neolithic; whether peoples like
Ligurians, Sicilians, Scythians, were Indo-Europeans or not, and of
what branch; where the blond Nordic type took shape and whether it
originally spoke dialects of the Germanic group; who built
Stonehenge and the other megalithic monuments of western Europe;
where the first home of the Indo-Europeans lay. But such problems
are intricate, and usually answerable, if at all, from stray indications
scattered among masses of literary and historical data controllable
only by the specialist, whose primary interests tend in other
directions. Where these documented indications fail, the problems
become speculative. We have no clear record of any indubitable
Indo-European people, in or out of Europe, before the second
millenium B.C. When they appear in history, they are already
differentiated into their familiar main divisions. The Bronze Age
Scandinavians seem likely to have been Indo-Europeans and
perhaps of the Germanic branch; for the Neolithic an identification
would be mere guessing. The LaTène Iron culture is
characteristically Keltic, that of the Hallstadt period and area less
certainly Illyrian and Keltic. And after all, such considerations
concern speech, or race, which can be associated with any culture.
Our present concern being primarily with the latter, it will be more
profitable to pass on from these questions and turn to regions
remote from those in which Occidental civilization assumed its
modern form.
251. China
China, far from Europe and known to the outside world only
recently, possesses a civilization so different from ours in a multitude
of aspects, that thought of connection between the cultures seems at
first unreasonable. One thinks of rice, pagodas, bound feet, queues,
silk, tea, ancestor worship, a strange, chopped, singing speech, and
writing in still stranger characters. Yet the Chinese have long had a
civilization identical in many of its constituents with our own: civil
government, rimed poetry, painting, trousers, wheat and barley, our
common domestic animals, bronze and iron, for instance. Since
most of these culture elements are wanting in Africa and Oceania, as
well as in native America, there is no inherent reason why they
should be expectable in China. Their repetition in China and in the
West as the result of independent causes would be remarkable.
Evidently many if not all of this group of common traits represent
absorptions into the civilization of China, or diffusions out of it into
the West, much as the larger part of early European civilization was
imported out of the nearer Orient.
In the broader perspective of culture history, then, China no longer
stands aloof. The roots of her civilization are largely the same as
those of our own. In this light, understanding of Chinese civilization
involves two steps. The first is the tracing of the elements derived
from the west or imparted to it. The second is the recognition of how
these were remodeled and combined with elements of local growth
and thereby given their peculiarly Chinese cast and setting.
Authentic historical records of China go back only three thousand
years, and her archæology is little known. Beyond the beginning of
the Chou dynasty, about 1100 B.C., or more exactly, beyond a point
when this dynasty was about three centuries old, in 827 B.C., the
Chinese possess only legendary history, in which slight strands of
fact are interwoven with fabricated or fabulous constituents. Then,
too, the Chinese have long been genuinely more advanced than
their neighbors, than all of their world, in fact; with the result that they
could hardly escape the conviction of their own superiority and self-
sufficiency, and the belief that they had devised almost everything in
their own culture. This presumption led to the conscientious
manufacture by native historians of dates for inventions which were
really made outside of China.
Beginning, then, in the ninth century B.C., we find the Chinese a
settled and populous people in the lower valley of the great Yellow
river, in what is now the northeastern corner of the “Eighteen
Provinces” or China proper, from about Si-an-fu to Peking. They may
have come from middle Asia or still farther west by a national
migration, as has sometimes been conjectured: there is nothing to
show that they did, and a great deal to suggest that they had lived in
or near their seats of that period long before. It is difficult to imagine
that the Chinese could have moved out of central Asia without
leaving a part of their number behind, or without leaving conspicuous
traces of their culture among their former neighbors. Of this there is
no evidence. For one of the most advanced peoples of its time to
remove itself and its civilization complete and unimpaired would be
without parallel in history, and indeed is inconceivable as soon as
one turns from the vague idea to face specific details of the process.
Nevertheless the Chinese as we first know them had the principal
grains and tamed animals, the metals and plow and wheel of
contemporary Eastern Asia and Europe. While it is scarcely
thinkable that this great complex of culture traits should not have
been due to connections with the west, there is every probability that
these connections were of the sort that have been traced so
frequently in foregoing pages: diffusions unaccompanied by
populational drifts, or at least in the main independent of them. When
it is recalled that western Turkistan held cereal-growing and animal-
raising inhabitants far back in the Neolithic, and that the Bronze
period is definitely represented in Siberia,[36] such transmission will
not seem far fetched. It is also well to remember that all through the
historic period central Asia contained farming populations, cities,
traders, and skilled artisans, some measure of which evidences of
higher culture it is only necessary to project a few thousand years
backward to complete the link in the cultural chain between China
and the west. We tend to overlook this fact because it is the transient
Hun and Mongol invasions that chiefly obtrude into both western and
Chinese history. Whenever the nomads ceased boiling over, they
receded from the historians’ view. Obviously they could not have
migrated and fought and burnt and slain among each other
continuously. The more settled life at home, which they led most of
the time, and into which they were always inclined to take over the
religion, writing, and arts of the Orient, India and China, is the phase
of their existence most likely to be overlooked, but which, from the
point of view of the history of civilization, is far more important than
their evanescent conquests. In this underlying phase they were the
connectors of Near and Far East.
It is interesting in this connection that so far as more recent
transmissions between China and the west are datable or positively
traceable, they took place chiefly by the long land route through
central Asia. The first trade between the Roman empire and China of
the Han dynasty was overland; so was the introduction of Buddhism
and cotton from India. In each case sea communication came later. It
was scarcely before Mohammedan times that ocean trade between
China and the west became important.
On the other hand, the Chinese and other east Asiatics always
lacked, and still lack, several aspects of the grain-cattle-horse-wheel-
metals cluster that are very ancient and practically universal in
Europe, the Near East, and even central Asia. They do not use milk
or its products, wool, nor bread-leaven. It has been suggested that
the cluster was transmitted to China before these traits had been
added to it; and that when they finally might have reached China,
they found its people satisfactorily established in a culture containing
substitutes for these traits, and therefore resistive to them.
It is significant that even to-day northern China, within which the
oldest known China lay, still cultivates wheat, barley, and millet, and
breeds cattle, horses, sheep, goats, and swine, as did the Swiss
lake-dwellers; whereas in southern China the typical grain and
animal are rice and the buffalo, as in Indo-China and Malaysia.
There are evidently two fundamentally distinct economic systems
here, characteristic respectively of Europe and west and north Asia,
and of southeastern Asia; and evolving in the main independently.
The first civilized China, that of the Chou period, that which produced
Confucius as its literary standardizer, and has chiefly shaped
Chinese traditions and institutions ever since, belonged to the great
northern and western cycle; was in fact its easternmost outpost.
This brings up the question whether Chinese writing could not also
have sprung from a western source, notably the Sumerian
Cuneiform, which it superficially resembles in its linear, non-pictorial
strokes, and in its mixed ideographic-phonetic method. The
connection has indeed been asserted, but no satisfactory evidence
of specific correspondences has been adduced. The most that it
seems valid to maintain is that a remote connection is thinkable; a
connection not extending beyond a limited number of characters or
the idea or method of writing. The earliest Chinese characters
preserved on bronzes are nearly two thousand years younger than
the most ancient inscriptions of the system which developed into the
classic Cuneiform. Both systems are fairly crystallized when they first
come to our knowledge. Their formative stages, in which such
connection as they might have would be most apparent, are
obscure. It is well to remember that Cuneiform and Egyptian
hieroglyphic, which were virtually contemporaneous and much
nearer to each other geographically, have not yet been brought into
specific relation as regards their origins.
252. Growth and Spread of Chinese

Civilization
Chou China at first embraced most of Shensi and Honan, southern
Shansi and Chihli, and western Shantung. It was feudal, and
practically as separatist as mediæval Germany. The chief functions
of the over-king were to perform sacrifices, to admonish the kings
and princes, and to govern his small dynastic domain. Unity lay not
so much in an effective organization as in an idea, the feeling of a
common race and especially of a common civilization. This idea has
persisted to the present. It is adhesion to the culture of China, to its
deep roots, its permanence, its humanities, that has always made
Chinamen feel themselves Chinamen; has in fact sooner or later
turned into Chinamen all alien elements, whether they were intrusive
conquerors or primitive folk, that came to be included within the limits
of the realm. In this way common customs and ideals already united
the dozen or more larger Chou states and hundreds of
dependencies; and chronic internal warfare did not prevent this era
from being the age of Confucius, Laotse, Mencius and the other
great sages that from the sixth to the fourth centuries formulated the
typical Chinese character and attitude.
During the latter part of the Chou period began a gradual reduction
of the number of feudal states, due to the larger swallowing the
smaller. By the middle of the third century, two of these had emerged
as preponderant: Ts’in in the west, centering about the Wei valley,
and Ch’u on the south, along the middle Yangtse. Both were frontier
states, less cultivated and hardier than the others, and regarded as
barbarian or only half Chinese. Ts’in may have included some
Hunnish absorptions; Ch’u very likely represented the rule of a
Chinese dynasty over a native population whose original affiliations
may have been either with the non-Sinitic Anamese of to-day, with
the Shan-Siamese division, or with some closer branch of the Sinitic
family, but who were gradually assimilating the culture and speech of
the northern old China. At last, in 223 B.C., Ch’u fell before Ts’in, and
within two years the remaining states in the northeast collapsed. For
the first time China, from nearly its present frontier to south of the
Yangtse, was effectively under one active ruler, Shi Hwang-ti, the
“first emperor.” His dynasty crumbled almost at his death, but only to
be succeeded by the famous Han line, under which, in the two
centuries before and the two after Christ, China extended,
consolidated, and prospered. The boundaries of the empire were
pushed, in name at least, to virtually their present limits; and though
political control may often have been slight, cultural influence
progressed rapidly south of the Yangtse, much as Gaul became
Romanized at the same time. Even the survival of half-independent
barbarian groups here and there in the south and west has its
parallel in the persistence of Keltic speech in French Brittany. By the
seventh to ninth centuries after Christ, when the empire flourished
once more under the Tang dynasty, the mass of southern China may
be considered to have been substantially assimilated. Even the
southern coast, which was the last area to be integrated, and which
retains to-day the greatest dialectic differentiations and autonomous
tendencies, had become part of the Chinese polity and civilization.
The consequence was that when in the thirteenth century the
Mongols and in the seventeenth the Manchus conquered the empire,
they accomplished little more than the overthrow of one dynasty by
another. The course of Chinese culture went on undisturbed, as it
had in several previous historic periods when half of the realm
passed temporarily under the sway of nomads or barbarians from
the north.
A considerable measure of the cultural predominance of China
over her neighbors is to be ascribed to her more numerous
population, which in turn was partly due to the cultural advance. The
Chinese were the first nation to maintain a system of fairly reliable
census records. In the first century and a half after Christ, under the
Hans, ten censuses showed from 29 to 83 million inhabitants, the
average being 63 millions, or about the same as the estimated
population of the Roman empire at its height; somewhat more than
that of Europe when America was discovered. A thousand years
later, between 1021 and 1580, eight censuses yielded from 43 to
100 millions, with an average of 62 millions. Under the Manchus the
population gradually rose from 125 millions in 1736 to 380 in 1881.
To-day, the northern half of China is about twice as populous as the
southern, and the eastern half exceeds the western in the same
ratio. This superior density of population in the northeast reflects the
fact that ancient China was the northeast. The same grounding in
the past is evident in the fact that from the time of the Chous until the
Mongol conquest in 1268, the imperial capitals lay mainly in Shensi
or Honan, the core of the old kingdom.
Many ingredients of modern Chinese civilization, and most of its
distinctive color, have been present in it since the opening of the
historic period. Such are the use of hemp and silk as the typical
textile materials; of jade as the precious stone of the nation; the
tremendous, life-long moral authority accorded to parents, and the
associated worship of ancestors; the unusual respect and rewards
for learning; a professed contempt for war and emotional activity;
aversion for mythological and metaphysical, scientific, or any other
sort of speculation, and coupled therewith an unflagging interest in
practical ethics, in the cultivation of character, in the finer shaping of
the relations of individuals. These and other leanings endow Chinese
civilization with something persistently idiomatic, with a quality of
coherent originality. If this civilization were less great, China and the
countries influenced by it would be spoken of as constituting what
among barbarous and savage peoples we call a culture-area. In the
widest perspective, they are such. China, India, the West—which in
this view of course includes the Near East as well as Europe—are
the three great focal centers of civilization in the eastern hemisphere.
Their cultures have risen far above those of the intervening and
peripheral nations. Until quite recent centuries, the three have run
their courses with approximately equal achievement. And while
exchanging elements since prehistoric times, they have each molded
both what they borrowed and what they devised into a unified and
distinctive design, have stamped it with original patterns. In short,
culture development in China, India, and the Occident has been
coördinate.
Of course, this distinctness of the three great regions of Old World
civilization does not imply that diffusion of culture elements between
them ever ceased. It is the form more than the content of civilization
that is peculiar to the three areas. From India, for instance, China
derived Buddhism, which was accorded a reception under the Hans
and cultivated with fervor in the following centuries. Cotton came in
the wake of the religion—first as a rare and valuable textile, then to
be grown. The West, within the historic period, gave glass and
perhaps the impulse toward a Chinese “invention”—porcelain, a
glazed-through pottery. In recent centuries the West acted as
transmitter for several elements of American origin, tobacco, for
example, and maize, which quickly became an important food-plant
in parts of China. There have even been reimportations. Gunpowder
is said to have been used for fireworks in China in the fifth century,
for war in the twelfth, but its employment for the propulsion of
missiles from firearms is due to introduction by the Altaic nations in
the fifteenth century. From the fourth century B.C. on, there are
repeated references in Chinese sources to the magnetic needle and
to “south-pointing chariots”—apparently a compass-like device used
on land, though probably only as a mechanical toy. Then the needle
was applied to geomantic purposes, until Arab or other foreign
sailors took it up as a true mariner’s compass, and in the eleventh or
twelfth century reintroduced it to the Chinese as an instrument of
navigation.
Nor was civilization as stagnant in China as the outsider is likely to
think, who becomes aware first of all of its persistent native flavor.
The old war chariot, for instance, went out of use about
contemporaneously in China and the West. Printing from engraved
blocks was in vogue in the sixth century after Christ, from movable
clay types in the dynasties between the Tangs and the Mongols,
from metal types not much later, since the art was established
among the imitating Koreans in the fifteenth century. A system of
classifying the numerous characters was invented before the Tangs;
the modern one of grouping them according to 214 radicals, under
the Mings. True encyclopædias were first compiled in the fourteenth
century—four hundred years earlier than in the West. The system of
awarding office on the basis of literary examinations took root under
the Hans and became organized under the Tangs. The earliest
poetry, three thousand years ago, was rimed, and had four or five
monosyllabic words in the line. In the Tang time, the line became
extended to seven words; and still later was the origin of the peculiar
rhythm of alternating tones—a system by which every other word
was one bearing the “even” tone and those between any of the other
tones. Paper making is said to date from the Hans, and paper money
was first issued—disastrously as in some of the first Western
attempts—under the Mongols. These and dozens of other instances
that might be compiled exemplify, as does the history of ancient
Egypt, that even those cultures constantly move to which one is
tempted to apply the stigma “conservative” or “tradition-bound.”
253. The Lolos

Scattered in the mountains of southern and western China are a
number of barbarous, semi-independent peoples of distinctive ways
and speech who maintain their national or tribal status. They seem
on first contact to promise a picture of the pre-Chinese culture of the
area, but examination shows their customs to be a blend of primitive
and advanced, ancient and recent elements. The Lolos of Szechuan
may serve as an example. They eat meat from their herds, use no
milk, but wear woolen clothing. They grow neither cotton nor rice.
They raise oats, buckwheat, maize, and potatoes. Two of these
plants are of north or west Asiatic origin; the others are American.
Plows are used. Houses are of lashed bamboos, and rain-coats of
palm-fiber. No pottery is made, but iron is worked into weapons and
tools by native smiths. The Lolos are warlike. They fight like
Malaysians with lance and sword. They are organized “feudally,” into
nobility and commoners, with tribal heads or lords. They marry
cousins. Religion resembles that of the more backward Indo-Chinese
and Malaysian peoples. Sorcerer-priests cure disease; sacrifice
animals for their blood, the flesh being eaten; offer also fermented
liquor; divine the future by observing parts of the sacrificed animals
—the cracks that develop in heated shoulder-blades (§ 97). There is
a native system of writing, which seems to derive from Chinese
stimulus, if not sources. It is obvious that this culture has fused
together very old elements that are characteristic of southeastern
Asia, with elements that have flowed in from remote sources or
during the most recent centuries. It is also clear that certain
ingredients of Chinese culture have been freely absorbed and others
rejected by this mountain people.
Such cultures as that of the Lolos may be described as internally
marginal or peripheral. They differ from externally marginal cultures,
like those of the Bushmen, Australians, Fuegians, in that the latter,
on account of their geographical remoteness, have retained their
ancient level with relative purity. Included marginal cultures, on the
contrary, being of necessity exposed to subsequent influences, are
regularly a mixture of belated and recent ingredients, no matter how
well integrated these may have become.
254. Korea
Korea has repeatedly been under the political authority of China,
more often autonomous, but for three thousand years has been
dependent on China culturally. Non-Chinese influences have also
reached it: such as an alphabet of Indian origin (§ 149); and probably
the earliest iron industry came in from Altaic sources. In its turn, the
peninsula transmitted to Japan: until about a thousand years ago,
Chinese writing and culture reached Japan mainly via Korea. The
spread of Chinese civilization was perhaps largely of the usual, slow,
diffusing kind, but was several times accelerated by the settlement in
Korea of groups of Chinese refugees, colonists, or adventurers; for
instance in Chou and Han times. The center of power and civilization
within Korea has gradually moved southwards, which suggests the
waning of original central Asiatic affiliations as Chinese ones
became stronger. The first realm to be defined was Fuyu on the
Sungari river. Then followed Kokorai or Korai, whence our name
Korea. In the centuries immediately before and after Christ, Shinra
and then Hiaksai, farther south on the peninsula, came into the lead.
By the beginning of this period not only the writing but the classic
books of China had been introduced. Since the fourteenth century
Confucianism has been the state religion—though the people had
long before become Buddhists—and literary examinations for office
of the Chinese type have been in vogue.
255. Japan
Japan is the one country of eastern Asia from which considerable
prehistoric data are available. There are indeed no indubitable
evidences of any Palæolithic culture or race, but shellheaps and
burial mounds abound and have been explored. The shell deposits,
of which 4,000 have been found, are probably the accumulation of
refuse of occupation by the Ainu, the first known inhabitants of
Japan, now surviving only in the extreme north of the island chain
and in Sakhalien, and still a primitive people. This race is different
from the Japanese, and has often been classified as Caucasian (§
27). The shell deposits show the aborigines to have been fishers and
hunters, without agriculture or edible domestic animals. They had the
bow, dog, incised hand-made pottery, and ground stone axes, and
were thus approximately in an early Neolithic stage.
A somewhat dubious bronze age is sparsely represented in
southern Japan. It has been ascribed to an invasion about the

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Travel Industry Economics A Guide for

Financial Analysis 3rd Edition Harold

Entertainment industry economics a guide for financial

Financial Market Bubbles and Crashes, Second Edition:

Sustainability in Business: A Financial Economics

Timing for animation 3rd Edition Harold Whitaker

International Financial Statement Analysis CFA

Medical Decision Making 3rd Edition Harold C. Sox

Rediscovering Travel A Guide for the Globally Curious

Detecting Malingering and Deception 3rd Edition Harold

Travel Industry Economics

ISBN 978-3-319-27474-4 ISBN 978-3-319-27475-1 (eBook)

Library of Congress Control Number: 2016935870

© Springer International Publishing Switzerland 2016

Printed on acid-free paper

This Springer imprint is published by Springer Nature

trav·el—involves a trip, a journey, a transmission, and a movement from one place

I am indebted to the transportation and travel industry economists upon whose

New York City Harold L. Vogel

Part II Getting There

Part III Being There

4.4 Valuing Hotel Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Part IV Doing Things There

Appendix A: Sources of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

Appendix B: Valuation Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269

Appendix C: Major Games of Chance and Slots . . . . . . . . . . . . . . . . . . 271

Travel broadens the mind.—Proverb, early twentieth century

It also costs money and takes up time.

1.1 Time Concepts

© Springer International Publishing Switzerland 2016 3

Nevertheless, investigations into the economics of time, including those of

Average Weekly Hours Average Weekly Hours

Fig. 1.2 Average weekly

Fig. 1.3 Average annual

total hours worked by women.7 A similar conclusion as to average annual hours

driver of demand. And this is as valid an observation today as it was in Veblen’s

Fig. 1.4 Distance-decay

1.2 Supply and Demand Factors

Ultimately, more leisure time availability is not a function of government decrees,

1.2.2 Demand for Leisure

Fig. 1.6 Supply and

Price (P) per unit

Quantity (Q) of units per time

Fig. 1.7 Backward- Wage

L¼ f ðQ, T c Þ þ λ½Q pðT T c Þ;

which is then differentiated with respect to Q, Tc, and the multiplier λ.

1.2.3 Expected Utility Comparisons

Individuals differ in terms of emotional gratification derived from consumption of

1.2.4 Demographics and Debts

245. Iranian Peoples and Cultures

246. The Composite Culture of the Near East

247. Phœnicians, Aramæans, Hebrews

248. Other Contributing Nationalities

249. Ægean Civilization

252. Growth and Spread of Chinese

253. The Lolos

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