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Tourism and Poverty Reduction: An Economic Sector Analysis for Costa Rica and Nicaragua

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  • Manuel Vanegas Sr
  • William Gartner
  • Benjamin Senauer

Abstract

This study examines the existence of a long-run relationship between indigence or extreme poverty reduction and agricultural, manufacturing and tourism development in Costa Rica and Nicaragua. An econometric methodology consisting of an autoregressive distributed lag bounds testing approach to co-integration is used. For Costa Rica, agricultural and manufacturing (not statistically significant) and tourism development are negatively related to indigence poverty with estimated elasticity values of −0.50 for agriculture, −0.17 for manufacturing and −0.58 for tourism. For Nicaragua, the estimated elasticity values are −0.40 for agriculture, −0.13 for manufacturing (not statistically significant) and −0.64 for tourism. Tourism's rate of poverty reduction was statistically significantly greater than that of agriculture for both countries. The main contribution of this paper lies in the understanding of sector contributions to alleviating poverty. The methods utilized can be undertaken by most countries in the world, thereby providing insights into developing targeted investment policies and strategies to achieve higher rates of poverty reduction.

Suggested Citation

  • Manuel Vanegas Sr & William Gartner & Benjamin Senauer, 2015. "Tourism and Poverty Reduction: An Economic Sector Analysis for Costa Rica and Nicaragua," Tourism Economics, , vol. 21(1), pages 159-182, February.
    • Handle: RePEc:sae:toueco:v:21:y:2015:i:1:p:159-182
    DOI: 10.5367/te.2014.0442
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    3. Nikeel Kumar & Ronald Ravinesh Kumar, 2020. "Relationship between ICT and international tourism demand: A study of major tourist destinations," Tourism Economics, , vol. 26(6), pages 908-925, September.
    4. Wenming Shi & Meifeng Luo & Mengjie Jin & Seu Keow Cheng & Kevin X. Li, 2020. "Urban–rural income disparity and inbound tourism: Spatial evidence from China," Tourism Economics, , vol. 26(7), pages 1231-1247, November.
    5. Namhyun Kim & HakJun Song & Ju Hyun Pyun, 2016. "The relationship among tourism, poverty, and economic development in developing countries," Tourism Economics, , vol. 22(6), pages 1174-1190, December.
    6. Renuka Mahadevan & Hidayat Amir & Anda Nugroho, 2017. "Regional impacts of tourism-led growth on poverty and income inequality," Tourism Economics, , vol. 23(3), pages 614-631, May.
    7. Garidzirai Rufaro & Matiza Tafadzwa, 2020. "Exploring the Tourism-Poverty Alleviation Nexus in the Brics Group of Nations," Ekonomika (Economics), Sciendo, vol. 99(1), pages 93-109, June.
    8. Jinkun Yang & Haitao Ma & Lisheng Weng, 2022. "Transformation of Rural Space under the Impact of Tourism: The Case of Xiamen, China," Land, MDPI, vol. 11(6), pages 1-12, June.
    9. Xia Wang & Peiru Cai, 2022. "The relationship between tourism development and multidimensional poverty reduction: A decoupling analysis," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(4), pages 2501-2518, August.
    10. Asif Khan & Sughra Bibi & Ardito Lorenzo & Jiaying Lyu & Zaheer Udden Babar, 2020. "Tourism and Development in Developing Economies: A Policy Implication Perspective," Sustainability, MDPI, vol. 12(4), pages 1-19, February.
    11. Jorge Garza-Rodriguez, 2019. "Tourism and Poverty Reduction in Mexico: An ARDL Cointegration Approach," Sustainability, MDPI, vol. 11(3), pages 1-10, February.
    12. Lei Zhao & Xin Xia, 2020. "Tourism and poverty reduction: Empirical evidence from China," Tourism Economics, , vol. 26(2), pages 233-256, March.
    13. Hasmin Tamsah & Gunawan Bata Ilyas & Jumiaty Nurung & Yusriadi Yusriadi, 2023. "Model Testing and Contribution of Antecedent Variable to Absolute Poverty: Low Income Family Perspective in Indonesia," Sustainability, MDPI, vol. 15(8), pages 1-16, April.
    14. Andrzej Tucki & Korneliusz Pylak, 2021. "Collective or Individual? What Types of Tourism Reduce Economic Inequality in Peripheral Regions?," Sustainability, MDPI, vol. 13(9), pages 1-16, April.

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