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This paper analyses the impact of tourism on total and extreme monetary poverty, in order to illuminate the debate surrounding the links between tourism and poverty. We apply fixed effects models to panel data on the Peruvian departments for the period 2001-2013. We also identify the key factors in the tourism model affecting the empirical results. Our findings show that tourism is important for the poor, but its benefits do not reach the extreme poor to the same extent, and its potential is not fully exploited. The weak macroenvironment and low community participation impede poverty reduction through tourism. [ABSTRACT FROM AUTHOR]