Evidence on the growth effects of gambling
KeywordsUnit Root Capita Income Granger Causality Growth Effect Granger Causality Test
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- 1.This view is supported by growth theorists Hoover and Giarratani (1984, p. 319): “If a region can develop local production to meet a demand previously satisfied by imports, this ‘import substitution’ will have precisely the same impact on the regional economy as an equivalent increase in exports. In either case, there is an increase in sales by producers within a region.”Google Scholar
- 2.Threshold is the minimum number of consumers required to support the industries. Range refers to the area over which the industry draws customers. For more information, see Berry and Horton (1970).Google Scholar
- 3.Handle refers to the total of the bets placed, not the amount won or the amount kept by the racetrack. Similarly, lottery ticket sales are measured, rather than sales net of jackpots paid. Casino revenue refers to the amount the casino keeps after all winning bets have been paid. These are the standard measures of volume in the respective industries. For a more detailed explanation, see Walker and Jackson (2007a).Google Scholar
- 5.It is perfectly legitimate to include variables other than lagged values of Xt and Yt in the two regressions. For example, see Conte and Darrat (1988). But including such variables “muddies the causality waters” since X could cause Y through affecting some other included variables, rather than directly.Google Scholar
- 6.See Sheehan and Grieves (1982) and Noble and Fields (1983).Google Scholar
- 7.This may be an overstatement. Holtz-Eakin et al. (1988, p. 1373) suggest that a large number of cross-sections make it possible for lag coefficients to vary over time. Of course, there is always the question of how large is “large.” It is unlikely that the eight to 14 cross sections here are “large” numbers.Google Scholar
- 12.For example, New Jersey and Mississippi were tested together, yielding results similar to those in Table 4.1. A complete discussion can be found in Walker (1998a).Google Scholar
- 14.The interested reader may see Walker (1998a) for the full analysis and results.Google Scholar
- 15.Clotfelter and Cook (1991) and Borg, Mason, and Shapiro (1991) are the most comprehensive studies to date. Also see Alm, McKee, and Skidmore (1993), Borg and Mason (1993), Erekson, Platt, Whistler and Ziegert (1999), Gulley and Scott (1993), Kaplan (1992), Mikesell (1992), Ovedovitz (1992), Thalheimer (1992), and Thornton (1998).Google Scholar
- 17.Walker and Jackson (2007b) is an update of their earlier study (1998), which relies on annual casino data from 1991–2005. Their preliminary results suggest that the economic growth effects from casino gambling are short-lived.Google Scholar
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