The Effect of Tourism Revenues on Income Inequality with the Quantiles Panel Regression Approach (Case study:  Selected Developing Countries)

Mehrara, Mohsen; Shirmohammadi, Pegah

doi:10.22054/tms.2019.10432

The Effect of Tourism Revenues on Income Inequality with the Quantiles Panel Regression Approach (Case study: Selected Developing Countries)

Document Type : Research Paper

Authors

Mohsen mehrara ¹

Pegah Shirmohammadi ²

¹ Professor department of economics, faculty of economics of Tehran university

² Ph. D. Student of Economics, Payame Noor University, Tehran, Iran

https://doi.org/10.22054/tms.2019.10432

Abstract

Income inequality and efforts to reduce it is one of the most important concerns of societies in the current world. on the one hand, countries are looking for income-generating resources, and on the other hand, they are trying to reduce income inequalities. The tourism industry is considered as the most widespread and one of the most important income and employment generator industries, can achieve both goals at the same time. In this study, using mixed data method and Panel Quantiles regression approach in a selection of developing countries (including 31 countries), the effect of tourism revenues on income inequality in the period of 1995-2015 has been investigated. The advantage of using this model is to evaluate the response variable (inequality of income) against the interference of independent variables (especially tourism revenues), not only in the data center of mass but also in all parts of the distribution, especially in the initial and final deciles. The results of the research show that tourism revenues lead to a decrease in income inequality directly and indirectly by reducing unemployment. In addition, countries that are at higher levels or quantiles of inequalities are more likely to use the benefits of tourism to reduce inequality. Therefore, they can benefit from tourism development policies to reduce inequality more effectively.

Keywords

Income Inequality

Tourism Income

Quantile panel Regression

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