Tourism and income inequality

Abstract

PurposeTourism has grown to be one of the world's largest and fastest-growing economic industries. Tourism development is viewed as a tool to improve income distribution as it allows people at the bottom of the pyramid to get involved in the industry. This study aims to examine the impact of tourism on income inequality in the top income equality countries.Design/methodology/approachThe paper employs fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares techniques to investigate the dynamic impact of tourism on income inequality in the world's most income equality countries, from 2001 to 2016.FindingsThe result shows that tourism is one of the major drivers of income equality. Thus, tourism can be used to reduce a country's income disparity.Practical implicationsAs a result, policymakers should support the tourism industry to reduce income disparity and enhance income distribution.Originality/valueGiven the conflicting findings in the literature, this study reexamines this link and attempts to backwardly assess if the top equal-income countries in the world are heavily dependent on tourism.

The effects of national and international tourism on income inequality: evidence from Asia-Pacific economies

“…(2020) for Malaysia, and several cross-country studies such as Alam and Paramati (2016) for developing economies, Raza and Shah (2017) for top 43 TA countries, Nguyen et al . (2021) for 97 countries, and Subramaniam et al . (2022) for the top 9 income equality countries [5].…”

“…For the cross-country studies, the negative influence of tourism on income inequality is found in the studies of Proença and Soukiazis (2008), Nguyen et al . (2021) and Subramaniam et al . (2022).…”

“…Proença and Soukiazis (2008), Nguyen et al . (2021), Zhang (2021) and Subramaniam et al . (2022)) and (3) multi-provinces within a country (e.g.…”

“…Incera and Fern andez (2015), Mahadevan et al (2016) and Shahbaz et al (2020)), (2) multi-countries (e.g. Proença and Soukiazis (2008), Nguyen et al (2021), Zhang (2021) and Subramaniam et al (2022)) and (3) multi-provinces within a country (e.g. Goh et al (2015), Li et al (2016) and Zhang (2022)).…”

Can tourism curb income inequality? Tourism Agenda 2030

“…A relatively scant amount of rigorous work has been devoted to the tourism-income inequality nexus. Indeed, there is a relatively larger strand of the related literature, which has reported an inequality reduction effect of tourism (Li et al , 2016 for Chinese regions, Croes and Rivera, 2017 for Equador, Uzar and Eyuboglu, 2019 for the Turkish case, Nguyen et al , 2021 for a sample of 97 countries and Shahbaz et al , 2021 of the Malaysian case study, Chi, 2021 for a sample of 36 countries, Fang, 2021 for the case of 103 countries, Subramaniam et al , 2022 for a sample of top income equality countries and Chiu and Wang, 2022 for the 102 countries).…”