The effect of perceived tourism impacts on local residents’ happiness through life satisfaction in Balinese tourism villages

Tourism development generates both economic opportunities and socio-cultural pressures for local communities. However, empirical evidence remains limited regarding how local residents’ perceptions of tourism’s economic benefits and negative impacts jointly influence happiness, particularly through different dimensions of life satisfaction. This study examines the mediating roles of material and non-material life satisfaction in the relationship between perceived tourism impacts and local residents’ happiness in Balinese tourism villages. Survey data were collected from 151 local residents across five tourism villages in Bali and analyzed using Partial Least Squares – Structural Equation Modeling (PLS-SEM). The results indicate that perceived economic benefits significantly enhance both material and non-material life satisfaction. Notably, the indirect effect through non-material life satisfaction is substantially stronger, indicating that tourism-related economic gains contribute more to residents’ happiness when they reinforce social cohesion, community participation, and emotional well-being. In contrast, perceived negative impacts of tourism do not significantly affect residents’ happiness or material life satisfaction. Interestingly, perceived negative tourism impacts are positively associated with non-material life satisfaction, indicating that strong socio-cultural cohesion within local communities may buffer residents from tourism-related pressures. Overall, the findings suggest that happiness in tourism villages is shaped not only by material improvements but, more importantly, by non-material life satisfaction rooted in social relationships and community resilience. These findings highlight the importance of social sustainability and community resilience in tourism development and suggest that policies focusing solely on economic outcomes may underestimate the social mechanisms through which tourism influences local residents’ happiness.