Air pollution and tourism development: An interplay

We empirically examine the interplay between air pollution and tourism development based on a fine-grained dataset covering monthly-level tourism information of 58 major cities in China from October 2013 to December 2017. We adopt an empirical strategy utilizing wind speed as an instrumental variable for air pollution to deal with the endogeneity caused by the reverse causality. We control for individual city fixed effects, month fixed effects, meteorological conditions and other social factors of tourism destinations. We find the interplay between air pollution and tourism development. Our study offers significant empirical evidence for policy makers to design policies that can mitigate the consequences of air pollution in the tourism sector and manage the development of the tourism economy.