Pro-Wellbeing Tourism: The Dynamic Relationship Between Household Consumption Expenditure and Tourism Growth in Tanzania

ABSTRACT Measurement of people’s sustainable wellbeing is important for monitoring and evaluating economic activities. Therefore, there is a need for a statistical approach capturing population’s sustainable wellbeing to complement measures of market activities. Since there are several dimensions of wellbeing, this paper pioneers the measurement of material wellbeing in Tanzania by studying the dynamic relationship between tourism development, agricultural growth, and per capita household final consumption expenditure during 1990–2017. The Vector Autoregressive model and Impulse Response Function reveal that tourism development has a significant positive impact on overall wellbeing of the population, but the country needs grassroots people-focused policies to translate tourism growth into improved wellbeing of the poorest. Further, promoting the production and consumption of tourism products integrates other sectors in the production process and leads to multiple benefits to the poor.