Does tourism development matter in reducing income inequality in Africa’s Indian Ocean Island countries?

Tourism is one of the world’s largest and fastest-growing economic sectors today. The development of tourism plays a crucial role in distributing income more equitably among all social classes. This study examines the correlation between tourism and income inequality in four African Indian Ocean Island countries: Madagascar, Mauritius, Seychelles, and Comoros. These countries are considered as members of the Indian Ocean Commission. The data was collected from the World Bank and World Inequality databases covering the period from 2000 to 2022. To ensure accuracy, four different estimation techniques were used including Ordinary Least Square Method, Least Square Dummy Variable, and Random and fixed-effect models. The findings indicate that the growth of tourism is linked to a reduction in income inequality in these African Island countries of the Indian Ocean. In essence, countries with higher levels of tourism tend to have lower income inequality. Governments could consider implementing economic policies that support social and inclusive tourism, thereby reducing income inequality.