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.