The impact of an urban tourism boom on farmers' income in neighboring rural communities: Evidence from the Lijiang Ancient City, China

Abstract It is of great significance to explore the impact of tourism development on the neighboring economy. The Lijiang Ancient City (LAC) is a World Cultural Heritage Site and one of the important tourist destinations in China. However, the impact of an urban tourism boom on farmers' income in neighboring rural communities is not clear. Drawing on a comprehensive dataset of 672 field surveys conducted between 2009 and 2016 in the Lashihai watershed of Yunnan Province, China, we produce compelling evidence indicating that the tourism boom in the LAC has had a positive impact on farmers' income in neighboring rural communities. Our findings reveal that increasing per capita income in nearby communities by about 6.99% to 8.55% for every 10% increase in tourism activity; however, this impact diminishes as the distance to the LAC increases. Furthermore, the tourism boom has facilitated a harmonious and mutually beneficial coexistence between agriculture and tourism in neighboring communities, leading to the enhancement of farmers' livelihood strategies and expanded employment opportunities. Additionally, notable disparities in the economic impacts of the LAC tourism boom. Both non‐poor farmers and those with higher social capital have experienced a positive increase in income. The effect on income is more pronounced for farmers residing in closer proximity to Lashihai lake, compared with those residing farther away. This study provides an empirical basis for promoting synergistic urban–rural development and rural revitalization.