How far can air pollution affect tourism in China? Evidence from panel unconditional quantile regressions

Abstract

Previous studies provide empirical evidence for the connection between air pollution and tourism. However, many of them take the nexus as a linear one. It remains unexplored whether any thresholds are required for the nexus to materialize. This study systematically investigates whether PM2.5 concentrations–an essential indicator of air pollution–affect tourism in China at various tourism development levels. We analyze 284 Chinese cities from 2008 to 2018 using the Unconditional Quantile Regression method. Our statistical results reveal that air pollution positively influences tourism (regarding tourist visits and tourism revenue) in areas with low tourism development levels. However, a complex correlation between air pollution and tourism emerges when tourism development has reached a certain level. The correlation is initially negative, then positive, and finally disappears. But, the overall correlation remains negative. The effects of the interaction between air pollution and tourism resources on tourism are inverted U-shaped, implying that tourism resources can mitigate the negative effects of air pollution on tourism only when tourism development has reached a certain level. Based on the above findings, the associated policy implications are discussed.