Is urbanization the link in the tourism-poverty nexus? Case study of China

This study examines the role of urbanization in explaining the effect of tourism on poverty which is proxied by the Engel coefficient for China's 31 provinces over the period of 1999-2016. For urban poverty, both domestic and inbound tourism affect poverty indirectly via urbanization as the link. For rural areas, poverty falls by more in response to domestic tourism increase compared to inbound tourism but urbanization fails to serve as a conduit for this tourism-poverty link. These results are however masked when the measure of aggregate poverty is used, thus highlighting the need to consider the rural-urban divide in poverty. Lastly, while China's rural tourism development policy has successfully reduced rural poverty, it is unclear if this had any effect on reducing income inequality within and across provinces.

Automated summary

This study found that urbanization plays a role in explaining the impact of tourism on poverty by indirectly affecting urban poverty through urbanization as a mediator, while in rural areas, domestic tourism has a greater impact on reducing poverty compared to inbound tourism, but urbanization is not the conduit for this relationship between tourism and poverty. The results highlight the importance of considering the rural-urban divide in poverty.