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Measuring displacement effects across gaming products: a study of Australian gambling markets

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  • Lisa Farrell
  • David Forrest

Abstract

This article seeks to establish the extent of displacement effects across gaming products. This is a particularly difficult question to address with precision. To date, many studies have looked at policy changes such as the introduction of a new product into the market to assess the severity of displacement effects. However, simple before and after comparisons are invalid. One needs to know what the appropriate counterfactual would have been in the absence of the policy change - which by its very nature is unobservable. The alternative is to look at identical populations exposed to different regimes. Australia represents such a natural experiment. In Australia, Betting and Gaming legislation is determined at the state level, giving rise to some interesting differentials across states within a single country. This article estimates a state level (fixed effects) panel data model, exploiting the intra-state differences in the portfolio of gaming products available, to estimate the extent of displacement effects across the gaming sector. The results are particularly relevant to the current UK policy debate, which is focused on the potential impact on the existing market following a forthcoming, radical deregulation of the industry (with further liberalization proposed).

Suggested Citation

  • Lisa Farrell & David Forrest, 2008. "Measuring displacement effects across gaming products: a study of Australian gambling markets," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 53-62.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:1:p:53-62
    DOI: 10.1080/00036840701591379
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    Cited by:

    1. Brad R. Humphreys, 2021. "Legalized Sports Betting, VLT Gambling, and State Gambling Revenues: Evidence from West Virginia," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 47(1), pages 9-28, January.
    2. Farrell, Lisa & Fry, Jane M., 2021. "Australia's gambling epidemic and energy poverty," Energy Economics, Elsevier, vol. 97(C).
    3. Humphreys, Brad & Perez, Levi, 2011. "Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries," Working Papers 2011-17, University of Alberta, Department of Economics.
    4. June Buchanan & Yun Shen, 2021. "Gambling and marketing: a systematic literature review using HistCite," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2837-2851, June.
    5. Brad Humphreys & Levi Perez, 2012. "Network externalities in consumer spending on lottery games: evidence from Spain," Empirical Economics, Springer, vol. 42(3), pages 929-945, June.

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