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How Windfall Income Increases Gambling at Poker Machines

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  • Hielke Buddelmeyer

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Kyle Peyton

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

In December 2008 and March-April 2009 the Australian Government used fiscal stimulus as a short-run economic stabilization tool for the first time since the 1990s. In May-June 2012, households received lump sum cheques as compensation for the introduction of the Carbon Tax scheduled for 1 July 2012. This paper examines the relationship between these financial windfalls and spending at electronic gaming machines (EGMs) using data from 62 local government areas in Victoria, Australia. The results show large increases in spending at EGMs during the periods when Australian households received economic stimulus cheques. Increased spending at EGMs in December 2008 amounted to 1% of the total stimulus for that period. We conclude that the 2008-2009 stimulus packages substantially increased gambling at EGMs in Victoria. We find no unexpected increase in spending at EGMs in the months when Carbon Tax compensation cheques were paid.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2013n01.

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Length: 21 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:iae:iaewps:wp2013n01

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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Keywords: Gambling; stimulus; Australia; windfall income; electronic gaming;

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  1. Leigh Andrew, 2012. "How Much Did the 2009 Australian Fiscal Stimulus Boost Demand? Evidence from Household-Reported Spending Effects," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-24, March.
  2. Epley, Nicholas & Gneezy, Ayelet, 2007. "The framing of financial windfalls and implications for public policy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 36-47, February.
  3. Lisa Farrell, 2012. "Chasing Data: Sources of Data for the Study of Gambling Economics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 45(4), pages 488-496, December.
  4. Delia Bailey & Jonathan N. Katz, . "Implementing Panel-Corrected Standard Errors in R: The pcse Package," Journal of Statistical Software, American Statistical Association, vol. 42(c01).
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