The impact of tourism on income inequality in developing economies: Does Kuznets curve hypothesis exist?

Md. Samsul Alam, Sudharshan Reddy Paramati (Lead / Corresponding author)

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    Abstract

    This paper investigates the impact of tourism on income inequality in developing economies. The analysis utilizes a balanced panel data set from 1991 to 2012 on 49 developing economies around the world. The empirical findings confirm the long-run equilibrium relationship among the variables. Results from long-run elasticities indicate that tourism increases income inequality significantly. Further, the long-run elasticities on squared tourism revenue confirm the existence of Kuznets curve hypothesis between tourism revenue and income inequalities, meaning that if the current level of tourism becomes double then it will significantly reduce the income inequality in developing economies. Given these findings, our study offers significant value to the body of knowledge on the issue of tourism and income inequality in developing economies and also provides important policy implications.

    Original languageEnglish
    Pages (from-to)111-126
    Number of pages16
    JournalAnnals of Tourism Research
    Volume61
    Early online date28 Sep 2016
    DOIs
    Publication statusPublished - Nov 2016

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    Keywords

    • Developing economies
    • Economic growth
    • Income inequality
    • Kuznets curve hypothesis
    • Tourism revenue

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