Cointegration and Causality Analysis of Portuguese Tourism and Air Quality

Abstract

This chapter aims to fill the knowledge gap regarding the relationship between tourism and air quality, specifically in the Portuguese tourism industry, with a focus on tourist nationality. It examines whether this relationship differs according to tourist origin. This study uses an air pollutant, PM10, with a strong impact on human health that has been highly neglected in the literature. Despite the great use of CO2 in assessing the causal relationship between tourism and the environment, this is not the best indicator of air quality (AQ). This chapter presents results by applying vector autoregressive models (VAR) with monthly data for the period of 2007-2017, considering the nationality of tourists that visit Portugal. Results suggest that PM10 levels and tourism are negatively correlated (in the Pearson sense) with a link between them in the long run. This relationship is confirmed by the four methodologies tested. The negative relation in Pearson and cointegration results suggests that tourism can be affected by AQ in Portugal and may lead to better AQ.