The Impact of Air Pollution on Domestic Tourism in China: A Spatial Econometric Analysis

This study utilizes a spatial econometric model to analyze the impact of air pollution on domestic tourism in China. Based on a panel dataset covering 337 cities from 2004-2013, this study derives the following findings. (1) Air pollution significantly reduces domestic tourist arrivals in the local city. On average, if the concentration of PM2.5 (particulate matter equal to or less than 2.5 micrometers in width) in one city increases by 1 mu g/m(3), the number of domestic tourists to the city declines by 0.7%. (2) Air pollution demonstrates significant spatial spillover effects. If the PM2.5 in other cities simultaneously increases by 1 mu g/m(3), the number of domestic tourists traveling to the local city rises by 4.1%. (3) The magnitude of the spillover effects of air pollution is larger than the negative direct effects on local cities. This study suggests that enhancing air quality in the local area will effectively promote the domestic tourism industry in the local city. In addition, it is implied that a simultaneous improvement in the air quality in all cities might not lead to an increase in the number of domestic tourist arrivals. Thus, in order to deal with the spillover effects of air pollution on the domestic tourism industry, local governments should make efforts to develop cross-city or cross-region tourism.