Spatial Effects of Domestic Tourism on Urban-Rural Income Inequality

Abstract

Although much of the recent research has explored the relationship between domestic tourism and income inequality among regions, provinces, and cities, few studies have examined the impact of domestic tourism on income inequality between urban and rural areas within a region. This paper uses a panel dataset covering China’s 31 provinces for 21 years to investigate the spatial spillover effect of domestic tourism on urban-rural income inequality. An increase in domestic tourism revenue in neighboring provinces leads to a reduction in the local province’s urban-rural income inequality. Innovatively, we decompose domestic tourism revenue and consider the circumstances in different provinces. An increase in the number of neighboring provinces’ domestic tourists’ arrival decreases the local province’s urban-rural income inequality in western provinces but increases the inequality in eastern provinces; the effect is insignificant in central provinces. In order to improve urban-rural income inequality by attracting domestic tourists, this study suggests a collaborative strategy for the western region, a low-priority strategy for the central region, and a mitigation strategy for the eastern region.