Work

Housing wealth, mortgage debt, and tourism demand: Navigating urban-rural institutional divides and financial constraints in the context of China

Year: 2025

Type: article

Abstract: The relationship between housing markets and tourism demand involves a tension between the stimulating "wealth effect" and the constraining "crowding-out effect" of mortgage debt. Crucially, this dynamic depends on institutional environment. Using China Family Panel Studies data (2014–2020) and the Exact Affine Stone Index demand system, this study analyzes how this tension varies across China's urban-rural institutional divide. Findings reveal stark institutional disparities. Urban housing wealth (characterized by high liquidity) significantly boosts tourism's budget share; this effect is muted and conditional for rural households (characterized by illiquid assets). Crucially, mortgage debt exerts a potent crowding-out effect, dampening tourism spending as income rises. Urban tourism demand follows complex income patterns and is price-elastic, while rural tourism grows proportionally with income and is inelastic. Results underscore the need to integrate institutional context and financial constraints alongside wealth when analyzing discretionary consumption like tourism in rapidly evolving economies.

Source: Tourism Management

DOI: 10.1016/j.tourman.2025.105381

Authors: Yiying Li, Long Wen, Richard T.R. Qiu, Chang Liu

Institutions: University of Nottingham Ningbo China, Hong Kong Polytechnic University

Language: English

Topic: Diverse Aspects of Tourism Research

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Reduced inequalities, Sustainable cities and communities

Open Access status: hybrid

Estimated APC paid: $4,690