The Economics of Casino Gambling (PDF)
by
Douglas M. WalkerDouglas M. Walker
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. The Economics of Casino Gambling is a comprehensive discussion of the social and economic costs and benefits of legalized gambling. It is the first comprehensive discussion of these issues available on the market.
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Product Details
- ISBN-13:
- 9783540351023
- Publisher:
- Springer Berlin Heidelberg
- Publication date:
- 02/02/2007
- Edition description:
- 2007
- Pages:
- 207
- Product dimensions:
- 6.10(w) x 9.25(h) x 0.03(d)
Table of Contents
Introduction 1
Outline of the book 2
Casino gambling and economic growth 5
Introduction 5
Increased employment and wages 7
Capital inflow 8
Increased tax revenues 9
Import substitution 10
Increased “trade” 11
Increased transactions volume 12
Consumer surplus and variety benefits 14
Potential for immiserizing growth 15
Conclusion 16
Misconceptions about casinos and growth 19
Introduction 19
Industry cannibalization 20
The factory-restaurant dichotomy 23
The export base theory of growth 25
Money inflow (mercantilism) 28
Conclusion 32
Evidence on the growth effects of gambling 35
Introduction 35
The empirical question 35
Non-technical explanation of Granger causality 37
Granger causality with panel data 39
Synopsis of Granger’s procedure 40
Modifying the procedure for panel data 42=970 14$lStage 1 42=970 14$lStage2 43=970 14$lStage 3 44
Empirical results 45
Casino gambling 46
Greyhound racing 49
Lotteries 51
Isolated state lottery model 53
Summary and conclusion 55
Casino gambling and greyhound racing 55
Lotteries 56
Conclusion 56
Relationships among U.S. gambling industries 59
Introduction 59
Literature review 61
Data 64
Gambling volume variables 64
Adjacent-state variables 68
Demographic variables 70
Model and results 71
Discussion of results 74
Effects of cross-equation constraints 78
Policy issues 79
Tax revenue 81
Conclusion 82
The social costs of gambling 85
Introduction 85
Chapter outline 87
The economic definition of “social cost” 88
Modeling social costs 89
The definition applied 90
Theft as an illustration of social cost 91
Externalities and social costs 93
Alleged social costs of gambling 95
Legitimate social costs 97
Legal costs 97
Treatment costs 100
Psychic costs 100
Items improperly defined as social costs 101
Wealth transfers 102
Bad debts 103
Bailout costs 104
Government welfare expenditures 105
Modeling transfers 106
Industry cannibalization 108
Money outflow 109
Productivity losses 109
Theft 110
Conclusion 110
Miscellaneous social cost issues 113
Introduction 113
Problems estimating social cost values 114
Counterfactual scenario 115
Comorbidity 115
Pathological gambling and “rational addiction” 117
Surveys on gambling losses 119
Unidentified and unmeasured social costs 122
Restriction effects 122
Lobbying 125
Summary of political costs 129
Other perspectives on social costs 129
Cost of illness (COI) approach 130
Economic approach 131
Public health perspective 131
Revisiting the definition of “social cost” 132
The Australian Productivity Commission report 133
Adopting a single social cost methodology 135
Conclusion 136
Problems in gambling research 139
Introduction 139
Recognizing scopes of expertise 142
Calls for objectivity and transparency in research 144
General problems in the literature 145
Conflict of interest allegations 145
Dismissing research without refutation 146
Ignoring published work 148
Failure to analyze/criticize work cited 151
Specific examples of errors 151
Gambling as a wasteful activity 152
Why gambling is not a DUP activity 154
DUP and rent seeking 156
Casinos and crime 157
Grinols and Mustard (2006) 158
Gazel, Rickman, and Thompson (2001) 161
Grinols’ Gambling in America 162
Conclusion 164
Using research to inform policy 165
Introduction 165
Summary of economic issues 165
Benefits 166
Costs 167
General problems 168
Prevalence of pathological gambling 168
Foundations of gambling policy 170
Are cost-benefit analyses useful? 171
Property rights, freedom of choice, and government 172
Externalities “revisited 173
Conclusion 173
Primer on microeconomics 175
The production possibilities frontier 175
The indifference curve 179
Allocative efficiency 181
Supply, demand, and markets 183
Producer and consumer surplus 185
Summary 187
References 189
Index 205
Product Details
ISBN-13: | 9783540351023 | |
Publisher: | Springer Berlin Heidelberg | |
Publication date: | 02/02/2007 | |
Edition description: | 2007 | |
Pages: | 207 | |
Product dimensions: | 6.10(w) x 9.25(h) x 0.03(d) |