The impact and regional heterogeneity analysis of tourism development on urban-rural income gap

Abstract

Based on the panel data of 204 cities from 2008 to 2020, the study first uses the mixed OLS model and two-way fixed effect model to verify the direct impact of tourism on the urban-rural income gap. Next, we employ the instrumental variable method, as well as estimation methods such as 2SLS and GMM, to test for endogeneity problem present in the study. Furthermore, the mediating effect model is used to examine the mechanism through which tourism affects the urban-rural income disparity. The findings indicate that rural infrastructure acts as an intermediary between tourism development and the reduction of the urban-rural income disparity. Furthermore, the impact of tourism on narrowing the income gap seems to diminish gradually from the western regions to the eastern ones.