The tourism sector closely monitors fiscal stimulus policies during economic downturns, as these policies are generally assumed to increase consumer spending to aid recovery. However, previous retrospective analyses fail to capture the intricacies of the individual decision-making process. The varying contexts in which stimulus measures are applied further disrupt predictable consumers’ behavior, challenging the rational utility-maximization framework for household budget allocations. To address these gaps, a shift towards behavioral economics is essential for a nuanced understanding of how stimulus funds are allocated by recipients to tourism products. Through a mental accounting approach, this study suggests that factors at policy- (size and source), firm- (product presentation), and individual-level (tourism’s importance and contribution to quality of life) jointly influence tourism spending derived from stimulus checks. This study underscores the significance of behavioral economics principles in shaping effective fiscal stimulus policies and marketing strategies within the tourism sector.
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