Cointegration and Causality between Tourism and Poverty Reduction

Keywords

tourism; economic growth; poverty; cointegration technique; causality

Abstract

This study, using cointegration and causality tests, investigates the relationship among tourism development, economic expansion, and poverty reduction in Nicaragua. The results indicate a long-run stable relationship among the three. The causality tests suggest a one-way Granger causal relation between tourism development and economic expansion, and between tourism and poverty reduction, and a bidirectional causal relation between economic expansion and poverty. The nexus of tourism, economic expansion, and poverty reduction is established in the Nicaraguan economy. This result is supported by testing the sensitivity of the Granger causality test under different lag selections along the optimal lag. The empirical evidence points to the potential economic muscle of tourism to seriously tackle Nicaraguan poverty at scale through helping both Nicaragua's public and private sectors allocate resources to tourism development, resulting in the overall improvement of the economy.

Publication Date

1-1-2008

Original Citation

Croes, R., & Vanegas, M. (2008). Tourism and poverty alleviation: a co-integration analysis, Journal of Travel Research, 47(1), 94-103.

Number of Pages

94-103

Document Type

Paper

Language

English

Source Title

Journal of Travel Research

Volume

47

Issue

1

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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