Abstract
In recent years, Indonesia’s inbound tourism grew slowly. This study examined the effects of quality of environment on inbound tourism in 32 provinces over the period 2009 – 2018. We utilized several indices of environmental quality such as water quality index (WQI), air quality index (AQI), and environmental quality index (EQI). Meanwhile, our dependent variable, inbound tourism, is measured in terms of incidence and duration of stay. Previous studies acknowledged that there was a potential endogeneity between quality of environment and tourism. Therefore, instrumental variable (IV) in a static panel dataset was carried out in the estimation. The results showed that both WQI and EQI were positively and significantly correlated with the demand for inbound travelers. Furthermore, we found that there was a positive and significant relationship between AQI and length of stay of inbound visitors. Keywords : Environmental Quality; Inbound Tourism; Indonesia. JEL Classifications : Q500, Q530, Z300 DOI: https://doi.org/10.32479/ijeep.10526
Highlights
Given to the COVID-19 global pandemic that already disrupted tourism industry in every corner of the world, many travelers visit Indonesia every year for several leisure activities such as culture, language, food, world heritage sites, and marvelous scenery
In the former, it is important to note that both water quality index (WQI) and environmental quality index (EQI) were significantly and positively correlated with number of inbound tourists
The estimated coefficient implies that a one additional point increases in WQI and EQI, the demand for inbound tourism will increase by 1 % and 3 %, ceteris paribus respectively
Summary
Given to the COVID-19 global pandemic that already disrupted tourism industry in every corner of the world, many travelers visit Indonesia every year for several leisure activities such as culture, language, food, world heritage sites, and marvelous scenery. From 2009 onwards, with the improved capacity of the country’s special counter-terrorism squad, the GoI managed to ensure the issue of national security Such a condition brings a positive impact on the Indonesia’s macroeconomic growth, related to travel and tourism sector. Such a trend is somehow counterintuitive as the 2019 World Economic Forum’s Report on travel and tourism highlighted several factors that made Indonesia’s position jumped from rank 42nd in 2017 to 40th in 2019.
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