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The Impact of Casino Gambling on Housing Markets: A Hedonic Approach

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  • Michael Wenz

    (Winona State University)

Abstract

The social and economic impact of casino gambling has been a contentious issue in both the popular and academic press. Prior academic research has focused largely on constructing piece-by-piece cost benefit accounting, but theoretical and measurement issues have prevented researchers from reaching a consensus as to the bottom line impact of casino gambling. This paper uses a hedonic approach to estimate directly the implicit price and the welfare impacts of a casino on its local area. The hedonic approach provides consistent estimates of the net change in social welfare without relying on a piecemeal approach to measuring costs and benefits. Using data from the 1990 and 2000 U.S. Census of Population and Housing, the estimated net benefit of casino gambling at year 2000 levels was approximately 2% of household value, or about $2,000-$3,000 per household for households living near a casino. Additionally, there are positive spillover effects to neighboring in-state regions and no significant costs to out-of-state border regions. A particularly important finding for policymakers is that the benefits associated with a casino depend inversely on population density. Casinos are more likely to create net benefits in areas where population density is low.

Suggested Citation

  • Michael Wenz, 2007. "The Impact of Casino Gambling on Housing Markets: A Hedonic Approach," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 1(2), pages 101-120, June.
  • Handle: RePEc:buc:jgbeco:v:1:y:2007:i:2:p:101-120
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    File URL: http://www.ubplj.org/index.php/jgbe/article/view/512
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    Citations

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    Cited by:

    1. repec:eee:touman:v:62:y:2017:i:c:p:253-263 is not listed on IDEAS
    2. Michael Wenz, 2014. "Valuing Casinos as a Local Amenity," Growth and Change, Wiley Blackwell, vol. 45(1), pages 136-158, March.
    3. Jonathan Wiley & Douglas Walker, 2011. "Casino Revenues and Retail Property Values: The Detroit Case," The Journal of Real Estate Finance and Economics, Springer, vol. 42(1), pages 99-114, January.
    4. Huang, Haifang & Humphreys, Brad & Zhou, Li, 2014. "Do Urban Casinos Affect Nearby Neighborhoods? Evidence from Canada," Working Papers 2014-2, University of Alberta, Department of Economics, revised 01 Mar 2014.
    5. Juan Tomas Sayago-Gomez & Gianfranco Piras & Donald Lacombe & Randall Jackson, 2015. "Impact Evaluation of Investments in the Appalachian Region: A Reappraisal," Working Papers Working Paper 2015-06, Regional Research Institute, West Virginia University.
    6. repec:bla:pbudge:v:37:y:2017:i:1:p:26-46 is not listed on IDEAS
    7. Humphreys, Brad R. & Marchand, Joseph, 2013. "New casinos and local labor markets: Evidence from Canada," Labour Economics, Elsevier, vol. 24(C), pages 151-160.
    8. Brad R. Humphreys & Brian P. Soebbing, 2014. "Access to Legal Gambling and the Incidence of Crime: Evidence from Alberta," Growth and Change, Wiley Blackwell, vol. 45(1), pages 98-120, March.
    9. Huang, Haifang & Humphreys, Brad & Zhou, Li, 2014. "Urban Casinos and Local Housing Markets: Evidence from the US," Working Papers 2014-4, University of Alberta, Department of Economics.
    10. Cotti, Chad D. & Walker, Douglas M., 2010. "The impact of casinos on fatal alcohol-related traffic accidents in the United States," Journal of Health Economics, Elsevier, vol. 29(6), pages 788-796, December.
    11. Srinivasan, Arun & Lambert, Thomas, 2015. "The Impact of Stagnating Casino Revenues on State and Local Tax Receipts," MPRA Paper 69738, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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