Effect of the International Tourism Island Policy on Hainan Farmers’ Income and the Urban–Rural Income Gap: An Analysis Based on the GPCA and SCM Models
He Xia*, and Shaoying Wu**
*School of Economics, University of Sanya
#191 Xueyuan Road, Sanya, Hainan 572000, China
**University of Sanya
#191 Xueyuan Road, Sanya, Hainan 572000, China
The construction of Hainan International Tourism Island, one of the national strategies in China, implemented in January 2010. A common concern is whether the policy has managed to raise farmers’ income and reduce the income gap between urban and rural residents. Therefore, this study aims to make counterfactual causal inferences based on data from 2005 to 2018 on Hainan Province. This study applies both the generalized principal component analysis method and the synthetic control method. According to the model results, the policy did not increase farmers’ income in Hainan or narrow the income gap between urban and rural areas in the first five years. However, after 2014, the result reversed. The increasing farmers’ income and narrowing gap indicate that the tourism-related Kuznets curve hypothesis is valid for the policy. The results of a placebo test verify the robustness of this conclusion.
-  T.-T. Deng, G.-Y. Zou, and M.-L. Ma, “Has International Tourism Destination Strategy Improved the Level of International Tourism in Hainan? A Policy Evaluation Based on the Difference-in-Difference Method,” Economic Management, Vol.38, No.07, pp. 147-155, 2016 (in Chinese).
-  M. C. Chou,“Does tourism development promote economic growth in transition countries? A panel data analysis,” Economic Modelling, Vol.33, No.2, pp. 226-232, 2013.
-  A. Devine and F. Devine, “Planning and developing tourism within a public sector quagmire: Lessons from and for small countries,” Tourism Management, Vol.32, No.6, pp. 1253-1261, 2011.
-  M. Puig-Cabrera and C. Foronda-Robles, “The Phenomenon of Tourism Poverty Trap: Is It Possible that Tourism Breaks the Vicious Circle of Poverty in Emerging Destinations?,” J. of Poverty, Vol.24 No.4, pp. 334-353, 2020.
-  D. Qin, H. Xu, and Y. Chung, “Perceived impacts of the poverty alleviation tourism policy on the poor in China,” J. of Hospitality and Tourism Management, Vol.41, pp. 41-50, 2019 (in Chinese).
-  M. Saayman and A. Giampiccoli, “Community-based and pro-poor tourism: Initial assessment of their relation to community development,” European J. of Tourism Research, Vol.12, No.3, pp. 145-190, 2016.
-  A. M. Fuller, “From part-time farming to pluriactivity: A decade of change in rural Europe,” J. of Rural Studies, Vol.6, No.4, pp. 361-373, 1990.
-  H. Rakotondramaro and L. Andriamasy, “Multivariate Granger Causality among tourism, poverty and growth in Madagascar,” Tourism Management Perspectives, Vol.20, pp. 109-111, 2016.
-  S. Deller, “Rural poverty, tourism and spatial heterogeneity,” Annals of Tourism Research, Vol.37, No.1, pp. 180-205, 2010.
-  R. Croes, “The Role of Tourism in Poverty Reduction: An Empirical Assessment,” Tourism Economics, Vol.20, No.2, pp. 207-226, 2014.
-  J. L. Eugenio-Martin, N. M. Morales, and R. Scarpa, “Tourism and economic growth in Latin American countries: a panel data approach,” FEEM Working Paper No.26, 28pp., doi: 10.2139/ssrn.504482, 2004.
-  S. T. Katircioglu, “Revisiting the tourism-led-growth hypothesis for Turkey using the bounds test and Johansen approach for cointegration,” Tourism Management, Vol.30, No.1, pp. 17-20, 2009.
-  D. J. Telfer and R. Sharpley, “Tourism and Development in the Developing World,” 2nd edition, Routledge, 2008.
-  A. Gannon, “Rural tourism as a factor in rural community economic development for economies in transition,” J. of Sustainable Tourism, Vol.2, No.1+2, pp. 51-60, 1994.
-  A. Fleischer and D. Felenstein, “Support for rural tourism: Does it make a difference?,” Annals of Tourism Research, Vol.27, No.4, pp. 1007-1024, 2000.
-  J. Liu, P. Nijkamp, and D. Lin, “Urban-Rural Imbalance and Tourism-Led Growth in China,” Annals of Tourism Research, Vol.64, pp. 24-36, 2017.
-  C. P. Nguyen, C. Schinckus, T. D. Su, and F. H. L. Chong, “The Influence of Tourism on Income Inequality,” The Influence of Tourism on Income Inequality, doi: 10.1177/0047287520954538, 2020.
-  J. H. Kim and K. H. Kang, “The interaction effect of tourism and foreign direct investment on urban–rural income disparity in China: a comparison between autonomous regions and other provinces,” Current Issues in Tourism, Vol.23, No.1, pp. 68-81, 2020.
-  Y. Yang and K. K. F Wong, “A Spatial Econometric Approach to Model Spillover Effects in Tourism Flows,” J. of Travel Research, Vol.51, No.6, pp. 768-778, 2012.
-  R. Mahadevan and S. Suardi, “Panel evidence on the impact of tourism growth on poverty, poverty gap and income inequality,” Current Issues in Tourism, Vol.22, No.3, pp. 253-264, 2017.
-  X. Gu, G. Li, X. Chang, and H. Guo, “Casino Tourism, Economic Inequality, and Housing Bubbles,” Tourism Management, Vol.62, No.10, pp. 253-263, 2017.
-  S. Lee, “Income Inequality in Tourism Services Dependent Counties,” Current Issues in Tourism, Vol.12, No.1, pp. 33-45, 2009.
-  U. Uzar and K. Eyuboglu, “Can tourism be a key sector in reducing income inequality? An empirical investigation for Turkey,” Asia Pacific J. of Tourism Research, Vol.24, No.8, pp. 822-838, 2019.
-  Md. S. Alam and S. R. Paramati, “The impact of tourism on income inequality in developing economies: Does Kuznets curve hypothesis exist?,” Annals of Tourism Research, Vol.61, pp. 111-126, 2016.
-  R. Mahadevan, H. Amir, and A. Nugroho, “Regional impacts of tourism-led growth on poverty and income inequality: a dynamic general equilibrium analysis for Indonesia,” Tourism Economics, Vol.23, No.3, pp. 614-631, 2017.
-  T. Reardon, J. E. Taylor, K. Stamoulis, P. Lanjouw, and A. Balisacan, “Effects of Non-Farm Employment on Rural Income Inequality in Developing Countries: An Investment Perspective,” J. of Agricultural Economics, Vol.51, No.2, pp. 266-288, 2008.
-  F. Adu-Baffour, T. Daum, and R. Birner, “Can small farms benefit from big companies’ initiatives to promote mechanization in Africa? A case study from Zambia,” Food Policy, Vol.84, pp. 133-145, 2019.
-  M. M. Van den Berg, H. Hengsdijk, J. Wolf, M. K. Van Ittersum, W. Guanghuo, and R. P. Roetter, “The impact of increasing farm size and mechanization on rural income and rice production in Zhejiang province, China,” Agricultural Systems, Vol.94, No.3, pp. 841-850, 2007.
-  N. T. T. Pham, D. Nong, and M. Garschagen, “Natural Hazard’s Effect and Farmers’ Perception: Perspectives from Flash Floods and Landslides in Remotely Mountainous Regions of Vietnam,” Science of The Total Environment, Vol.759, Article No.142656, 2021.
-  T. Chapagain and M. N. Raizada, “Impacts of natural disasters on smallholder farmers: gaps and recommendations,” Agriculture and Food Security, Vol.6, Article No.39, pp. 1-16, 2017.
-  P. Dünhaupt, “Determinants of labour’s income share in the era of financialisation,” Cambridge J. of Economics, Vol.41, No.1, pp. 283-306, 2017.
-  A. Abadie, A. Diamond, and J. Hainmueller, “Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program,” J. of the American Statistical Association, Vol.105, No.490, pp. 493-505, 2010.
-  G. I. Allen, L. Grosenick, and J. Taylor, “A Generalized Least-Square Matrix Decomposition,” J. of the American Statistical Association, Vol.109, No.505, pp. 145-159, 2014.
-  R. Croes and M. Vanegas, Sr., “Cointegration and causality between tourism and poverty reduction,” J. of Travel Research, Vol.47, No.1, pp. 94-103, 2008.
-  J. Fang, G. Gozgor, S. R. Paramati, and W. Wu, “The impact of tourism growth on income inequality: Evidence from developing and developed economies,” Tourism Economics, Vol.7, pp. 1-23, 2020.
This article is published under a Creative Commons Attribution-NoDerivatives 4.0 International License.