How air pollution affects tourism revenue: evidence from China

It is acknowledged that air pollution has a detrimental impact on tourism revenue, but the mechanisms behind this impact remain unknown. Previous studies have merely assumed that air pollution affects tourism revenue through the number of tourists. Based on the inbound tourism data of 47 major tourist cities in China from 2005 to 2017, this study reveals that in addition to lowering the number of tourists, air pollution also reduces tourist expenditure per capita by shortening their length of stay, ultimately leading to a decrease in tourism revenue. The finding is robust even when the endogeneity of air pollution is considered. Moreover, the results also show that the impact of air pollution on tourism revenue, tourist flow, tourist expenditure per capita, and length of stay is nonlinear. The findings of this paper contribute to an accurate assessment of the economic consequences of air pollution on tourism.