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Estimating the Impact of Air Pollution on Inbound Tourism in China: An Analysis Based on Regression Discontinuity Design

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  • Daxin Dong

    (School of Business Administration, Southwestern University of Finance and Economics, Chengdu 611130, China)

  • Xiaowei Xu

    (School of Business Administration, Southwestern University of Finance and Economics, Chengdu 611130, China)

  • Yat Fung Wong

    (School of Business Administration, Southwestern University of Finance and Economics, Chengdu 611130, China)

Abstract

Prior studies have suggested the existence of a reverse causality relationship between air quality and tourism development: while air quality influences tourism, dynamic segments of the tourism industry (e.g., cruising, airline, foodservice) have impacts on air quality. This reverse causality hinders a precise estimate on the effect of air pollution on tourism development within a conventional econometric framework, since the variable of air pollution is endogenous. This study estimates the impact of air pollution on the inbound tourism industry in China, by controlling for endogeneity based on a regression discontinuity design (RDD). The estimate is derived from a quasi-experiment generated by China’s Huai River Policy, which subsidizes coal for winter heating in northern Chinese cities. By analyzing data from 274 Chinese cities during the period 2009–2012, it is found that air pollution significantly reduces the international inbound tourism: an increase of PM 10 (particulate matter smaller than 10 μ m) by 0.1 mg/m 3 will cause a decline in the tourism receipts-to-local gross domestic product (GDP) ratio by 0.45 percentage points. This study also highlights the importance of controlling for endogeneity, since the detrimental impact of air pollution would otherwise be considerably underestimated. This study further demonstrates that, although air pollution is positively correlated with the average expenditure of each tourist, it substantially depresses the number of inbound tourists. The results imply that air quality could potentially influence inbound tourists’ city destination choices. However, it is interesting to note that travelers in air polluted cities in China tend to spend more money.

Suggested Citation

  • Daxin Dong & Xiaowei Xu & Yat Fung Wong, 2019. "Estimating the Impact of Air Pollution on Inbound Tourism in China: An Analysis Based on Regression Discontinuity Design," Sustainability, MDPI, vol. 11(6), pages 1-18, March.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:6:p:1682-:d:215672
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    2. Zhang, Ning & Ren, Ran & Zhang, Qiong & Zhang, Tao, 2020. "Air pollution and tourism development: An interplay," Annals of Tourism Research, Elsevier, vol. 85(C).
    3. Wei Zhang & Ziqiang Liu & Yujie Zhang & Elly Yaluk & Li Li, 2021. "The Impact of Air Quality on Inbound Tourist Arrivals over China Based on Grey Relational Analysis," Sustainability, MDPI, vol. 13(19), pages 1-19, October.
    4. Bahram Zikirya & Jieyu Wang & Chunshan Zhou, 2021. "The Relationship between CO 2 Emissions, Air Pollution, and Tourism Flows in China: A Panel Data Analysis of Chinese Provinces," Sustainability, MDPI, vol. 13(20), pages 1-17, October.
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    6. Xiaowei Xu & Daxin Dong & Yilun Wang & Shiying Wang, 2019. "The Impacts of Different Air Pollutants on Domestic and Inbound Tourism in China," IJERPH, MDPI, vol. 16(24), pages 1-15, December.
    7. Beata Bieszk-Stolorz, 2022. "Impact of Subsidy Programmes on the Development of the Number and Output of RES Micro-Installations in Poland," Energies, MDPI, vol. 15(24), pages 1-14, December.
    8. Luojia Wang & Kerui Du & Bin Fang & Rob Law, 2023. "Escape from air pollution: How does air quality in the place of residence shape tourism consumption?," Tourism Economics, , vol. 29(4), pages 1074-1099, June.
    9. Ostale Valriberas, Daniel & Lanzi, Elisa & Van-Dingenen, Rita, 2022. "The economic consequences of air pollution policies in Arctic Council countries: a sectoral focus," Conference papers 333485, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Ge Gao & Xiuting Li & Xiaoting Liu & Jichang Dong, 2021. "Does Air Pollution Impact Fiscal Sustainability? Evidence from Chinese Cities," Energies, MDPI, vol. 14(21), pages 1-16, November.
    11. Daxin Dong & Xiaowei Xu & Hong Yu & Yanfang Zhao, 2019. "The Impact of Air Pollution on Domestic Tourism in China: A Spatial Econometric Analysis," Sustainability, MDPI, vol. 11(15), pages 1-16, August.
    12. Suharyono Suharyono & Kumba Digdowiseiso, 2021. "The Effects of Environmental Quality on Indonesia s Inbound Tourism," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 9-14.
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    14. Robaina, M. & Madaleno, M. & Silva, S. & Eusébio, C. & Carneiro, M.J. & Gama, C. & Oliveira, K. & Russo, M.A. & Monteiro, A., 2020. "The relationship between tourism and air quality in five European countries," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 261-272.

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