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New Goods and Economic Growth: Evidence from Legalized Gambling

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  • Walker, Douglas M.

    (Auburn University)

  • Jackson, John D.

    (Georgia College and State University)

Abstract

We address two questions: (1) Does legalized gambling spur economic growth? and, if so, (2) Does economic growth depend on "exports?" After developing a method of applying Granger causality to panel data, we analyze the casino gambling and greyhound racing industries. Empirical results suggest the answer to (1) is "yes." Both industries Granger cause economic growth. Because of the industry-wide results, the alleged "factory-restaurant dichotomy" for casino gambling does not appear to be valid. Based on the disparate thresholds and ranges of the industries and the consistent causal results (both industries Granger cause per capita income) the answer to question (2) appears to be "no."

Suggested Citation

  • 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.
  • Handle: RePEc:rre:publsh:v:28:y:1998:i:2:p:47-70
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    References listed on IDEAS

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    8. Newman Kwadwo Kusi, 1994. "Economic Growth and Defense Spending in Developing Countries," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(1), pages 152-159, March.
    9. Douglas M. Walker & John D. Jackson, 2011. "The Effect Of Legalized Gambling On State Government Revenue," Contemporary Economic Policy, Western Economic Association International, vol. 29(1), pages 101-114, January.
    10. Conte, Michael A & Darrat, Ali F, 1988. "Economic Growth and the Expanding Public Sector: A Reexamination," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 322-330, May.
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    Cited by:

    1. Michael J. Hicks, 2014. "Do Good Fences Make Good Neighbors? The Cross Border Impact of Casino Entrance," Growth and Change, Wiley Blackwell, vol. 45(1), pages 5-20, March.
    2. María Teresa Álvarez-Martínez & Michael L. Lahr, 2016. "Gaming, States, and Tax Revenues—the Tortoise or the Hare: A CGE Comparative Assessment of Casino Resorts and Games-Only Casinos," Growth and Change, Wiley Blackwell, vol. 47(2), pages 236-258, June.
    3. Young, Andrew T. & Higgins, Matthew J. & Levy, Daniel, 2013. "Heterogeneous Convergence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 238-241.
    4. Gazel, Ricardo & Rickman, Dan S. & Thompson, William N., 2000. "The Sources of Revenues for Wisconsin Native American Casinos: Implications for Casino Gaming as a Regional EconomicDevelopment Tool," The Review of Regional Studies, Southern Regional Science Association, vol. 30(3), pages 259-274, Winter.
    5. Matthew J. Higgins & Daniel Levy & Andrew T. Young, 2006. "Growth and Convergence across the United States: Evidence from County-Level Data," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 671-681, November.
    6. 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.
    7. Douglas M. Walker & John D. Jackson, 2007. "Do Casinos Cause Economic Growth?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(3), pages 593-607, July.
    8. Siew Hoon Lim & Lei Zhang, 2017. "Does Casino Development Have a Positive Effect on Economic Growth?," Growth and Change, Wiley Blackwell, vol. 48(3), pages 409-434, September.
    9. Granderson, Gerald & Linvill, Carl, 2002. "Erratum to "Regulation, efficiency, and Granger causality": [Int. J. Ind. Organ. ~20 (2002) 1225-1245]," International Journal of Industrial Organization, Elsevier, vol. 20(10), pages 1535-1535, December.
    10. Ray, Margaret, 2001. "How Much on that Doggie at the Window? An Analysis of the Decline in Greyhound Racing Handle," The Review of Regional Studies, Southern Regional Science Association, vol. 31(2), pages 165-176, Fall.
    11. Karl R. Geisler & Mark W. Nichols, 2016. "Riverboat casino gambling impacts on employment and income in host and surrounding counties," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 101-123, January.
    12. Matthew Higgins & Daniel Levy & Andrew T. Young, 2003. "Growth and Convergence across the US: Evidence from County-Level Data," Working Papers 2003-03, Bar-Ilan University, Department of Economics.
    13. Michael Lahr & Maria Alvarez, 2013. "Tortoise and the Hare Revisited? A CGE Analysis of Gaming and State Tax Revenues:," ERSA conference papers ersa13p191, European Regional Science Association.
    14. John M. Barron & Michael E. Staten & Stephanie M. Wilshusen, 2002. "The Impact Of Casino Gambling On Personal Bankruptcy Filing Rates," Contemporary Economic Policy, Western Economic Association International, vol. 20(4), pages 440-455, October.
    15. Humphreys, Brad R. & Marchand, Joseph, 2013. "New casinos and local labor markets: Evidence from Canada," Labour Economics, Elsevier, vol. 24(C), pages 151-160.
    16. Granderson, Gerald & Linvill, Carl, 2002. "Regulation, efficiency, and Granger causality," International Journal of Industrial Organization, Elsevier, vol. 20(9), pages 1225-1245, November.
    17. William R. Eadington, 1999. "The Economics of Casino Gambling," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 173-192, Summer.
    18. Mark Nichols & B. Stitt & David Giacopassi, 2002. "Community Assessment of the Effects of Casinos on Quality of Life," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(3), pages 229-262, March.
    19. Douglas M. Walker & John D. Jackson, 2008. "Market-based “disaster relief”: Katrina and the casino industry," International Journal of Social Economics, Emerald Group Publishing, vol. 35(7), pages 521-530, June.
    20. Douglas M. Walker, 2008. "Do Casinos Really Cause Crime?," Econ Journal Watch, Econ Journal Watch, vol. 5(1), pages 4-20, January.

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