Connecting tourism, economic growth and quality of life

Abstract

The paper attempts to theoretically define and empirically evaluate the relationship between quality of life, tourism and economic growth. The main objective is to determine what influences quality of life of the local population in inbound tourism markets in the context of sustainable tourism and economic development. The empirical investigation was conducted using descriptive statistics, cross-sectional analysis and multivariate regression analysis for a sample of the Republic of Croatia in the period between 2004 and 2019. Multiple regression analysis was conducted to answer the following research questions: Does higher competitiveness and economic growth, in addition to higher tourism consumption have a positive effect on the quality of life of the resident population? How do macroeconomic variables expressing economic growth, competitiveness and tourism affect the quality of life of the resident population? The basic hypothesis is that economies that are more competitive and achieve better results in terms of economic growth and achieve higher tourism consumption have a higher quality of life, which is one of the objectives of sustainable development. The quality of life of the resident population in inbound markets increases under the influence of increasing tourism consumption and the generation of higher tourism revenues, which are multiplicatively transmitted to the overall economy. A higher level of investment and, consequently, a higher tourist offer, at this level of tourism development, also has a positive impact on the growth of the human development index, which is used as an indicator of the quality of life of residents. Reaching a higher GDP per capita has a positive effect on the quality of life of the local population. The conclusions of the research and the results of the model can be used to implement a strategy for sustainable tourism development and the economy, as well as a targeted and more efficient tourism policy to increase revenues and reduce costs while increasing the overall satisfaction of all stakeholders in the tourism market. The paper represents a contribution to research on the relationship between quality of life, tourism and economic growth in inbound tourism economies.