Does rural tourism reduce relative poverty? Evidence from household surveys in western China

Abstract

Debates on whether tourism has pro-poor effects remain imperative and unsettled owing to the discrepancy of research perspectives, estimation techniques, data source, study regions, and variables designs, etc. With the eradication of absolute poverty in China, the focus of tourism-relative poverty nexus could get deeper insights into the poverty reduction efficacy of tourism development in developing countries. This study examines the impacts of rural households’ tourism participation on relative poverty using the survey data from 22 pro-poor tourism villages located in western China and the endogenous switching probit (ESP) model. The results show that participating in rural tourism reduces both objective and subjective relative poverty. However, it has no direct effect on subjective poverty, but exerts an indirect effect by decreasing objective poverty. Furthermore, heterogeneous effect analysis shows dual impacts. On the one hand, it brings reduction of relative poverty probability for tourism participants; on the other hand, it exacerbates the relative gap by individual endogenous capital endowments and narrows the gap by exogenous targeted poverty alleviation (TPA) policy interventions. Our findings extend theoretical significance of the pro-poor tourism arguments by clarifying the pro-poor effects and the pathways of rural tourism on both objective and subjective relative poverty at the household level. It also provides empirical evidence for improving the current anti-poverty policy related to rural tourism in China.