The impact of ethnic diversity on tourism revenue and tourist arrivals

We address the question “can cross-country differences in ethnic diversity explain cross-country differences in tourism revenues and tourist arrivals?” Thus, using data from 141 countries, we examine the effects of ethnic diversity on tourism revenues and tourist arrivals. We measure ethnic diversity using indices of ethnic fractionalization and measure tourism revenue using total, direct and indirect tourism contributions to gross domestic product. We find detrimental effects of ethnic diversity. Our results are robust to alternative estimation approaches as well as alternative ways to measure ethnic diversity.