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Threshold Effect and Empirical Test of Tourism on Poverty Alleviation——Based on Provincial Panel Data in Western China

【Authors】
ZHAO Lei, ZHANG Chen
【WorkUnit】
Zhejiang University of Technology, 310023.
【Abstract】

Based on the importance of tourism in alleviating rural poverty, this paper first introduces the FGT poverty index in development economics to measure the level of poverty in the western region from three aspects: head-count index, poverty gap index and squared poverty gap index. Then, based on the panel data of 12 provinces (municipalities directly under the Central Government and autonomous regions) in western China from 1999 to 2014, and taking tourism and economic growth as threshold variables, this paper builds a panel threshold regression model to evaluate the non-linear impact of tourism on rural poverty alleviation in the western region. The threshold model estimation results show that: (1) The level of tourism development shows obvious threshold effect on alleviating rural poverty. When the tourism development level is low, tourism can significantly reduce the head-count index and poverty gap index in the rural area. However, when the level of tourism development surpasses the threshold, the poverty alleviation effect mentioned above is no longer significant. And in this context, tourism has the potential to exacerbate rural poverty. (2) When the per capita real GDP is lower than the first threshold, the tourism industry does not slow down the headcount index and poverty gap index of rural poverty When the per capita real GDP surpasses the threshold, the marginal effect of tourism in reducing the head-count index and poverty gap index of rural poverty is opposite. However, when the per capita real GDP is around the threshold of 8717 yuan, the effect of tourism on rural squared poverty gap index changes from negative to positive. (3) The economic growth rate, as measured by the growth rate of per capita GDP, has a positive non-monotonic threshold effect on the head-count index, poverty gap index and squared poverty gap index of tourism in rural poverty reduction.

JEL:L83, I32

【KeyWords】
Tourism, Poverty Reduction, Foster-Greer-Thorbecke Index, Threshold Effect