Tourism, urbanization, and urban income inequality in China

Abstract

Despite the persisting interest in the nexus of tourism and income inequality, the relationships between tourism and urban income inequality remain unknown. In the past few decades, tourism, urbanization, and urban income inequality are all prominent social and economic phenomena in China. This study investigates such relationships and the underlying influence mechanism of urbanization based on provincial panel data in China between 1995 and 2019. The results show that tourism significantly increases urban income inequality. Moreover, there exists a Kuznets curve between tourism and urban income inequality. When the ratio of tourism revenue to GDP reaches the value of 0.416, the positive influence of tourism on urban income inequality reaches its maximum. Most of China’s provinces currently face the positive influence of tourism on urban income inequality. Besides, urbanization partially mediates tourism’s effects on urban income inequality. Heterogeneity analysis indicates that in high-urbanization, high-income, and low economic levels regions, tourism increases urban income inequality to a greater extent. This article enriches the knowledge of the association between tourism and income distribution.