Tourism at the Crossroads between Well-Being, Public Health and the Environment: Panel Data Evidence from the European Union

Abstract

The recent pandemic crisis led to a drop in tourism, and it highlighted the connection between tourism, healthcare, environmental concerns and well-being. In this context, the purpose of the research is to clarify the relationship between tourism, happiness, healthcare and environmental expenditure. Statistical data provided by the World Bank, Eurostat and the World Happiness Database from the EU27 countries, from 2000 to 2019, were used. In order to investigate the relationship between these indicators, the panel Autoregressive Distributed Lag (ARDL) method was used. In the long run, happiness and environmental and healthcare expenditure have a statistically significant and positive impact on tourism arrivals and receipts. It follows that a 1% increase in happiness supports between 4% and 9% of international tourism, while a 1% increase in environmental expenditure supports an increase of 2% in international tourism. Additionally, there is a significant interaction between happiness and either environmental or healthcare expenditure in the long run. This means that increasing happiness diminishes the effect of the later on tourism arrivals and receipts. No short-term relationship was identified between arrivals and any of the above-mentioned variables. In the same context, healthcare expenditure has a negative short-term effect on tourism receipts. The research contributes to the literature by suggesting that increasing national happiness, healthcare and environmental expenditure has a beneficial spillover effect on tourism arrivals and receipts in the long run.