The Distributional Effect of Events on Rural and Urban Households in China

Abstract

International tourism is considered an effective means of economic development. However, the effects of tourism are not evenly distributed between rural and urban households in China.In the wake of significant socioeconomic events, the uneven distribution of the economic effects has huge welfare implications for Chinese households. This study is the first attempt to evaluate the distributional effect of two large, recent, sequential events on China's rural and urban households. It adopts an innovative approach that combines an econometric model and a two-household computable general equilibrium model. The results show that in terms of welfare, urban households were more adversely affected by the events than rural households. To mitigate the loss of welfare, measures should be taken to continually promote China as a destination and attract tourists after such events occur. Meanwhile, training and education should be made more accessible to rural households to increase their job opportunities.

Tourism as an engine for sustainable development in the Euroregion. Insights from the Tatra Euroregion

“…Although there are numerous empirical research papers that have attempted to measure the effects of various factors influencing tourism development and regional development in general, very few of them have followed a formal theoretical framework. On the other hand, there are many studies which have used empirical research based on statistical and econometric methods (Polenske and Hewings, 2004;Watson et al, 2008;Sun and Pratt, 2014;Inchausti-Sintes, 2015;Lamonica and Mattioli, 2015;Pratt, 2015;Smeral, 2015;Van Wyk et al, 2015;Cao et al, 2016;Dwyer et al, 2016;Williams, 2016;Allan et al, 2017;Li et al, 2017;Mahadevan et al, 2017;Dong et al, 2018).…”

Regional economic development and tourism: A literature review to highlight future directions for regional tourism research

“…These techniques can be classified as either structural or time-series analysis. The most widely used include the input–output model (Lamonica and Mattioli, 2015; Polenske and Hewings, 2004; Pratt, 2015; Smeral, 2015; vanWyk et al, 2015; Watson et al, 2008; Williams, 2016) or computable general equilibrium (CGE) (Allan et al, 2017; Cao et al, 2017; Dong et al, 2018; Dwyer et al, 2016; Inchausti-Sintes, 2015; Li et al, 2017; Mahadevan et al, 2017a, 2017b; Sun and Pratt, 2014). The problem with using the static CGE (or the input–output approach) is that it is an inter-industry model generally used to analyse the economic impact of specific events (a downturn in the economy or an industry, e.g.…”

“…Another econometric approach by Cao et al (2017) applies a combination of econometric model and a two-household CGE model that complement each other. The econometric model (a tourism demand elasticity model) produces price elasticity changes in tourism demand which are then used as inputs in the CGE model to estimate changes in rural urban disparities and associated welfare of urban and rural households.…”