Quality of life: The role of tourism and renewable energy

Abstract

The present research examines the effects of tourism (TOUR) and renewable energy consumption (REC) on quality of life (QoL) using a multivariate panel regression model. The model incorporates trade openness (TO) and urbanization (URB) as additional variables. The analysis focuses on the top 10 nations that receive the highest number of international visitors. The data sample used is comprised of annual observations during the period from 1995-2018. This paper adopts the assumption of cross-sectional independence and addresses cross-sectional heterogeneity by employing the second-generation econometric approach for panel data analysis. The results indicate that all variables exhibit long-run integration. The variables TOUR, REC, TO, and URB exhibit a statistically significant impact on the quality of life (QoL). The outcome clearly claims that TOUR, REC, TO, and URB have the potential to improve QoL. Findings also support bidirectional causalities between tourism and quality of life, renewable energy consumption and quality of life, trade openness and quality of life, urbanisation and quality of life, urbanisation and trade openness, as well as urbanisation and tourism. Moreover, the analysis reveals the presence of unidirectional causal relationships originating from the variable REC and directed towards the variables TOUR, TO, REC, and URB. The outcome is useful for policymakers in order to develop better energy-tourism plans for long-term economic success, which in turn will enhance life quality. The results could potentially be restricted by the QoL index. In this study, the QoL index is measured according to human development indicators, including life expectancy. Alternative measurements include access to knowledge and the purchasing power of the people. With a focus on the 10 most-visited countries in the world, this paper aims to contribute to the existing literature on the macroeconomic determinants of economic growth and its implications for life quality, with a specific focus on the 10 most-visited nations globally.