The unequal distribution of tourism's bounty: Tourism resources and income inequality in China

Abstract

This study quantitatively investigates the relationship between tourism resource development and urban-rural income inequality in China from 2005 to 2022. While tourism is frequently promoted as a strategic tool for regional development and poverty alleviation, its distributional effects remain ambiguous. Diverging from studies that rely on demand-side metrics such as visitor arrivals, this research utilizes panel data from 31 Chinese provinces to distinguish between the endowment of tourism resources (rated scenic spots) and economic flows. We specifically examine the impact of resource quality by differentiating between high-grade (A4-A5) and low-grade (A1-A3) scenic areas. Contrary to the pro-poor tourism hypothesis, which posits tourism as an equalizer, our empirical results, utilizing two-way fixed-effects and instrumental-variable strategies, indicate that the aggregate quantity of tourism resources exerts a statistically significant positive effect on the urban-rural income gap. Specifically, tourism development behaves as a mechanism of “disequalizing growth,” defined as a trajectory of economic expansion that increases overall aggregate wealth but simultaneously widens the income and resource gaps between different socioeconomic groups, such as urban and rural populations. Furthermore, we identify significant spatiotemporal heterogeneity: the inequality-widening effect is most pronounced in the economically developed Eastern region and intensified significantly following the 2008 global financial crisis. These findings suggest that, without targeted redistributive policies and supply-chain linkages, the mere development of tourism infrastructure, particularly capital-intensive, high-grade sites, may exacerbate rather than alleviate the urban-rural divide.