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Is tourism pro-poor in India? An empirical investigation using ARDL approach

Author

Listed:
  • Manu Sharma
  • Geetilaxmi Mohapatra
  • Arun Kumar Giri

Abstract

Purpose - The purpose of this paper is to examine the relationship between tourism sector development and poverty reduction in India using annual data from 1970 to 2018. The paper attempts to answer the critical question: Is tourism pro-poor in India? Design/methodology/approach - Stationarity properties of the series are checked by using the ADF unit root test. The paper uses the Auto Regressive Distributed Lag (ARDL) bound testing approach to cointegration to examine the existence of long-run relationships; error-correction mechanism for the short-run dynamics, and Granger non-causality test to test the direction of causality. Findings - The cointegration test confirms a long-run relationship between tourism development and poverty reduction for India. The ARDL test results suggest that tourism development and economic growth reduces poverty in both the long run and the short run. Furthermore, inflation had a negative and significant short-run impact on the poverty reduction variable. The causality test confirms that there is a positive and unidirectional causality running from tourism development to poverty reduction confirming that tourism development is pro-poor in India. Research limitations/implications - This study implies that poverty in India can be reduced by tourism sector growth and price stability. For a fast-growing economy with respect to economic growth and tourism sector growth, this may have far-reaching implications toward inclusive growth in India. Originality/value - This paper is the first of its kind to empirically examine the causal relationship between tourism sector development and poverty reduction in India using modern econometric techniques.

Suggested Citation

  • Manu Sharma & Geetilaxmi Mohapatra & Arun Kumar Giri, 2021. "Is tourism pro-poor in India? An empirical investigation using ARDL approach," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 38(4), pages 602-618, April.
    • Handle: RePEc:eme:jeaspp:jeas-02-2021-0031
    DOI: 10.1108/JEAS-02-2021-0031
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    More about this item

    Keywords

    Tourism development; Autoregressive distributed lag (ARDL); Poverty reduction; India; C32; L83; O11;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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