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Do Casinos Really Cause Crime?

  • Douglas M. Walker

This paper discusses the recent study by Grinols and Mustard (2006), which examines the relationship between casinos and county-level crime in the U.S. The authors conclude that casinos cause a significant amount of crime. However, there are a number of problems with their analysis. The most serious problem is that their paper uses a crime rate that excludes the visiting population at risk, thereby overstating the crime rate in casino counties. Second, the crime data used are potentially inaccurate. Third, the results may suffer from a bias caused by counties self-selecting into the “casino county†category. Fourth, the dummy variables used to account for casinos do not allow the authors to isolate the crime effect caused by casinos. Finally, the authors make conclusions that are not supported by their data, analysis, and results.

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Article provided by Econ Journal Watch in its journal Econ Journal Watch.

Volume (Year): 5 (2008)
Issue (Month): 1 (January)
Pages: 4-20

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Handle: RePEc:ejw:journl:v:5:y:2008:i:1:p:4-20
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  1. Stephen Fink & Alan Marco & Jonathan Rork, 2004. "Lotto nothing? The budgetary impact of state lotteries," Applied Economics, Taylor & Francis Journals, vol. 36(21), pages 2357-2367.
  2. Earl L. Grinols & David B. Mustard, 2005. "Casinos, Crime, and Community Costs," Law and Economics 0501001, EconWPA.
  3. Earl L. Grinols & David B. Mustard, 2001. "Business profitability versus social profitability: evaluating industries with externalities, the case of casinos," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(1-3), pages 143-162.
  4. Walker, Douglas M. & Jackson, John D., 1998. "New Goods and Economic Growth: Evidence from Legalized Gambling," The Review of Regional Studies, Southern Regional Science Association, vol. 28(2), pages 47-70, Fall.
  5. Douglas M. Walker & John D. Jackson, 2007. "Casinos and Economic Growth," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(3), pages 593-607, 07.
  6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  7. Douglas M. Walker, 2007. "Quantifying the Social Costs and Benefits of Gambling," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(3), pages 609-645, 07.
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