Evaluating impact of air pollution on China’s inbound tourism industry: a spatial econometric approach

ABSTRACT

Despite widespread concern about China’s air pollution crisis, very few studies have quantitatively explored its impact on China’s inbound tourism industry. From a spatial econometric perspective, this paper has quantified the direct, indirect and total effects of air pollution on international tourists visiting China, using panel data on 31 Chinese provinces during the period 2001–2013. The results confirm that air pollution has a significant direct negative effect on international tourists visiting China. There exists apparent spatial autocorrelation for provincial-level air pollution in China. Spatial Durbin model shows evidence that air pollution in the neighbouring provinces has a significant negative impact on international tourist arrivals in the local province. The spillover effect is even larger than the direct effect. When air pollution in the neighbouring provinces becomes serious, international tourists are unlikely to travel to the local province. The findings of this study have implications for local governments to strengthen inter-governmental environmental management to invigorate tourism market.

KEYWORDS:

• Air pollution
• international tourists
• China
• spatial econometrics
• panel data

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Air pollution is obviously not a localized problem restricted by administrative boundary. In fact, in Anaman and Looi (2000) study on air pollution effect on tourism in Brunei Darussalam, the haze-related air pollution was caused by the forest fires in Indonesia. Winds blow fumes originating from forest fires in Indonesia to Brunei.

2. Industrial waste gas is the general name of all kinds of pollutant gases (carbon dioxide, carbon disulfide, hydrogen sulfide, fluoride, nitrogen oxides, chlorine, hydrogen chloride, carbon monoxide, vitriol fog, mercury, lead, beryllium, soot and industrial dust), which are produced in the process of fuel combustion and industrial production. When industrial waste gas is emitted into the atmosphere, it would pollute the air and endanger people's health.

3. This calculation of international tourist arrival includes foreigners travel to mainland China and excludes residents from Hong Kong, Macao and Taiwan residents.

4. According to Song, Zheng, and Tong (2008) and Cui and Shi (2012), the indicator of waste gas emissions is commonly used indicator to measure the air pollution in environmental economics.

5. According to the technical classification, highways in China can be classified by expressway, class I to IV highway and unclassified highway. The importance of the highway corresponds to its technical grade. The high-grade highway (including expressway, class I highway and class II highway) is the main frame of Chinese highway, which has played a significant role in carrying products and people in China.

6. The year 2001 was chosen as the initial research year for two reasons. Firstly, China's tourism industry has flourished since the early twenty-first century. Secondly, a long-time span is useful in the panel data analysis.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China (grant number 41401145).