The economics of casino gambling / Douglas M. Walker.

Format:

Book

Author/Creator:

Walker, Douglas M.

Language:

English

Subjects (All):

Casinos--Economic aspects--Research--United States.

Casinos.

Gambling--Economic aspects--Research--United States.

Gambling.

Gambling--Economic aspects.

Research.

Casinos--Economic aspects.

United States.

Physical Description:

xii, 207 pages : 23 fig., 25 tables ; 24 cm

Place of Publication:

Berlin ; New York : Springer, 2007.

Summary:

Casino gambling has spread throughout the world, and continues to spread. As governments try to cope with fiscal pressures, legalized casinos offer a possible source of additional tax revenue. But casino gambling is often controversial, as some people have moral objections to gambling. In addition, a small percentage of the population may become pathological gamblers who may create significant social costs. On the benefits side, casinos are often purported to spur economic growth (increases in GDP), employment, and tax revenues. However, these benefits have been questioned. Does casino expansion simply "cannibalize" other industries, having no net effect? Or does casino gambling have significant positive economic impacts? The Economics of Casino Gambling is a comprehensive discussion of the social and economic costs and benefits of legalized gambling. It is the only comprehensive discussion of these issues available on the market.

Contents:

2 Casino gambling and economic growth 5

2.2 Increased employment and wages 7

2.3 Capital inflow 8

2.4 Increased tax revenues 9

2.5 Import substitution 10

2.6 Increased "trade" 11

2.7 Increased transactions volume 12

2.8 Consumer surplus and variety benefits 14

2.9 Potential for immiserizing growth 15

3 Misconceptions about casinos and growth 19

3.2 Industry cannibalization 20

3.3 The factory-restaurant dichotomy 23

3.4 The export base theory of growth 25

3.5 Money inflow (mercantilism) 28

4 Evidence on the growth effects of gambling 35

4.2 The empirical question 35

4.3 Non-technical explanation of Granger causality 37

4.4 Granger causality with panel data 39

4.4.1 Synopsis of Granger's procedure 40

4.4.2 Modifying the procedure for panel data 42

Stage 1 42

Stage 2 43

Stage 3 44

4.5 Empirical results 45

4.5.1 Casino gambling 46

4.5.2 Greyhound racing 49

4.5.3 Lotteries 51

Isolated state lottery model 53

4.6.1 Casino gambling and greyhound racing 55

4.6.2 Lotteries 56

5 Relationships among U.S. gambling industries 59

5.2 Literature review 61

5.3 Data 64

5.3.1 Gambling volume variables 64

5.3.2 Adjacent-state variables 68

5.3.3 Demographic variables 70

5.4 Model and results 71

5.4.1 Discussion of results 74

5.4.2 Effects of cross-equation constraints 78

5.5 Policy issues 79

5.5.1 Tax revenue 81

6 The social costs of gambling 85

6.2 The economic definition of "social cost" 88

6.3 Modeling social costs 89

6.3.1 The definition applied 90

6.3.2 Theft as an illustration of social cost 91

6.3.3 Externalities and social costs 93

6.3.4 Alleged social costs of gambling 95

6.4 Legitimate social costs 97

6.4.1 Legal costs 97

6.4.2 Treatment costs 100

6.4.3 Psychic costs 100

6.5 Items improperly defined as social costs 101

6.5.1 Wealth transfers 102

6.5.2 Bad debts 103

6.5.3 Bailout costs 104

6.5.4 Government welfare expenditures 105

6.5.5 Modeling transfers 106

6.5.6 Industry cannibalization 108

6.5.7 Money outflow 109

6.5.8 Productivity losses 109

6.5.9 Theft 110

7 Miscellaneous social cost issues 113

7.2 Problems estimating social cost values 114

7.2.1 Counterfactual scenario 115

7.2.2 Comorbidity 115

7.2.3 Pathological gambling and "rational addiction" 117

7.2.4 Surveys on gambling losses 119

7.3 Unidentified and unmeasured social costs 122

7.3.1 Restriction effects 122

7.3.2 Lobbying 125

7.3.3 Summary of political costs 129

7.4 Other perspectives on social costs 129

7.4.1 Cost of illness (COI) approach 130

7.4.2 Economic approach 131

7.4.3 Public health perspective 131

7.4.4 Revisiting the definition of "social cost" 132

7.4.5 The Australian Productivity Commission report 133

7.5 Adopting a single social cost methodology 135

8 Problems in gambling research 139

8.2 Recognizing scopes of expertise 142

8.3 Calls for objectivity and transparency in research 144

8.4 General problems in the literature 145

8.4.1 Conflict of interest allegations 145

8.4.2 Dismissing research without refutation 146

8.4.3 Ignoring published work 148

8.4.4 Failure to analyze/criticize work cited 151

8.5 Specific examples of errors 151

8.5.1 Gambling as a wasteful activity 152

Why gambling is not a DUP activity 154

DUP and rent seeking 156

8.5.2 Casinos and crime 157

Grinols and Mustard (2006) 158

Gazel, Rickman, and Thompson (2001) 161

8.5.3 Grinols' Gambling in America 162

9 Using research to inform policy 165

9.2 Summary of economic issues 165

9.2.1 Benefits 166

9.2.2 Costs 167

9.2.3 General problems 168

9.3 Prevalence of pathological gambling 168

9.4 Foundations of gambling policy 170

9.4.1 Are cost-benefit analyses useful? 171

9.4.2 Property rights, freedom of choice, and government 172

9.4.3 Externalities "revisited 173

Appendix Primer on microeconomics 175

A.1 The production possibilities frontier 175

A.2 The indifference curve 179

A.3 Allocative efficiency 181

A.4 Supply, demand, and markets 183

A.5 Producer and consumer surplus 185.

Notes:

Bibliographical references pages 189-203.

ISBN:

9783540351023

3540351027

OCLC:

82900373