Does Tourism Induce Gentrification? Evidence From Mexico City

Abstract

This thesis is the first empirical application of the sociological concept of tourism gentrification—the phenomena where tourism changes a neighborhoods landscape and causes residential displacement. I use Mexico City as a case study to quantify the impact of tourism and remote work on consumption amenities from 2010 to 2024. Drawing from a wide range of data sources including the registry of all businesses in Mexico City, Mexican census data, and all museums and historic sites within the city, I employ two identification frameworks with three estimation strategies: an instrumental variable long difference regression, an in- strumental variable probit model, and a difference-in-difference approach. I find limited evidence that tourism shifts a neighborhoods business profile toward tourism-facing ameni- ties. Rather, I find that tourism sustains commercial activity in areas with a high presence of foreign visitors. My findings build upon the existing tourism gentrification literature through a quantitative case study of in a major city in a periphery country.