Analysis of tourism projects in Colombia and their contribution to reducing income inequality and poverty
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Abstract
In recent years, tourism has demonstrated its potential to generate economic growth; however, its impact on reducing income inequality is less clear. This study examines the consensus view that the impact of tourism on income inequality depends on the country and the econometric method used to measure it. In developing countries such as Colombia, tourism development has been prioritised as a peacebuilding strategy and a way of achieving sustainable development. The collection of corporate tax from active tourism providers is overseen by the National Tourism Fund (FONTUR), which is also responsible for approving investment of this revenue to promote tourism projects that are aligned with national tourism policy. The study uses a panel fixed effect model to measure the impact of these projects on the income inequality and poverty of 24 Colombian states between 2013 and 2019. The results show that tourism projects have a greater effect on reducing poverty and income inequality in early-stage tourism destinations, and in states which have historically been less affected by violence and poverty.
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