The impact of tourism services development on income inequality in Kazakhstan’s regions

Type of the article: Research ArticleAbstractThis study investigates the relationship between tourism development and income inequality across regions of the Republic of Kazakhstan, using regional panel data for 2003–2024. The empirical analysis is based on an unbalanced panel of 16 regions, comprising 367 region–year observations. Fixed-effects regression models are employed to examine how two distinct dimensions of tourism development (tourism services per capita and tourist accommodation places per capita) affect income inequality measured by the regional Gini coefficient.The results indicate that the intensity of tourism service provision does not have a statistically significant effect on income inequality, even after controlling for cross-sectional dependence. In contrast, tourism accommodation infrastructure capacity is positively and statistically significantly associated with regional income inequality across all model specifications. Additional results show that income inequality is significantly influenced by poverty incidence, income polarization, healthcare expenditures, and the share of the rural population.The coefficients on the per-capita tourist accommodation variable are positive across all specifications. This indicates that the growth of this indicator contributes to increased income inequality. Moreover, the coefficients for the indicators ShServPop and ShServPop(–1) are significant. However, they cannot be relied upon, as Pesaran’s test rejects the hypothesis of cross-sectional independence for these specifications. This suggests that the growth of tourism infrastructure may exacerbate, rather than reduce, regional income differences due to capital concentration, skill-labor-oriented employment, and price effects.The results highlight the need for complementary policies that promote inclusive tourism development and mitigate inequality-enhancing effects of tourism-related infrastructure investment.AcknowledgmentThis study was funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan within the framework of the IRN grant project AP26198345 “Reducing socio-economic inequality in the regions of Kazakhstan through investments in health and improving the organization of the healthcare system.”