Escape from air pollution: How does air quality in the place of residence shape tourism consumption?

Abstract

Air quality has been demonstrated to be an important determinant influencing tourist decision making. In this paper, we investigate the effect of air quality in the place of origin on a resident’s tourism consumption and the moderating effect of household income on this relationship. We develop a conceptual framework to rationalize the effect and empirically examine it at the household level using China Labor-force Dynamics Survey data from 2016. The results show that poor ambient air quality increases tourism consumption. Furthermore, this relationship becomes stronger for the higher-income group: One standard deviation increase in the Air Quality Index would increase tourism expenditure as much as a 22.56% increase in family income. The methods of instrumental variable and functional-coefficient regression were employed for robustness analysis. These findings contribute to the literature by providing a new perspective for tourism demand studies and direct implications for tourism management and policy making.