Pro-poor tourism and income distribution in the second-tier provinces in Thailand

Abstract

ABSTRACT In Thailand, promoting tourism in 55 second-tier (non-major) tourism provinces is a recent policy tool for reducing poverty and income inequality. A computable general equilibrium (CGE) model linked with socio-economic household survey data shows that increasing domestic and foreign tourism demand in 22 first-tier tourism provinces can reduce the poverty rate, but overall national income inequality increases. However, increasing domestic tourism in the second-tier tourism provinces can slightly decrease income inequality. The model results also show that government collection and redistribution of new tourism-generated tax revenue to the 40% of poorest households significantly diminishes poverty and inequality.