Impacts of tourism on income inequality in Fiji: a quantile-on-quantile investigation

We examine the relationship between income inequality and tourism earnings in Fiji between 1980 and 2020 using the multivariate quantile-on-quantile regression (QQR) methodology. Unlike traditional approaches, the QQR methodology provides a comprehensive and detailed estimate of the dependency structure between inequality and tourism earnings. To strengthen the reliability of our findings, we include control variables such as per capita GDP, FDI-GDP ratio, real exchange rate, and trade openness. Our analysis reveals a complex and unstable relationship between income inequality and tourism earnings in Fiji. We establish that tourism earnings have a direct positive relationship with income inequality in several quantiles of inequality and tourism earnings for this country. However, we find an inverse relationship between tourism earnings and inequality in other quantiles. Similar asymmetries are detected in the relationships between inequality and the control variables.