Using Factor Analysis for Residents’ Attitudes towards Economic Impact of Tourism in Nepal

Tourism is one of the fast growing industries and valuable sectors of Nepalese economy, which plays an important role in the development of communities in the Nepalese context. Keeping this point into consideration, this study attempts to examine residents’ attitudes towards economic impact of tourism in Nepal by conducting face to face field survey of 601 respondents from certain tourist destinations with response rate 91.76%. A questionnaire was designed to collect the data and the respondents’ level of agreement has been measured by five point Likert scale. In this study, factor analysis has been used to analyze the impact of tourism in economic development of Nepal. This study finds that the respondents have undergone with both positive and negative economic impacts of tourism. The results of this study also reflect that the development of tourism has helped most of the informants to improve their economic opportunities, sanitation, and livestock production along with the opportunities to utilize alternative energy. It has also caused for the significant rise in price of goods, land and housing. The factor analysis found that 67.84% total variance of perception of residents has been explained by positive impact of tourism and 59.39% total variance has been explained by negative impact of tourism.