Tourism investment and poverty in Algeria’s economy: does the Autoregressive Distributed Lag model provide new evidence?

Abstract

Tourism is an effective method for attaining sustainable growth, reducing unemployment, and alleviating poverty because of its significance and influence on other economic activities. Therefore, the current investigation investigates the impact of tourism investment on poverty in the Algerian economy from 1995 to 2020. To study how tourism investment affects poverty reduction in both the short and long term, we use the Autoregressive Distributed Lag (ARDL) model. This model helps to handle issues like non-stationarity, connections between different areas, and correcting errors in the data. This paper contributes by providing empirical evidence of the impact of tourism investment on poverty reduction in Algeria and provides policy recommendations for sustainable growth. Policy implications can prompt policymakers to leverage tourism for poverty alleviation by promoting sustainable investment, improving infrastructure, and supporting employment. The study recognizes the prospects of tourism as a long-lasting economic driver of poverty alleviation. This research makes a significant contribution by presenting empirical evidence on how tourism contributes to poverty reduction in Algeria. We offer policymakers lessons to formulate effective policies that can maximize the economic and social impact of tourism.