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Do New Lottery Games Stimulate Retail Activity? Evidence from West Virginia Counties

Author

Listed:
  • Mark Skidmore

    () (Department of Economics, University of Wisconsin - Whitewater)

  • Mehmet Serkan Tosun

    () (Bureau of Business and Economic Research, College of Business and Economics, West Virginia University)

Abstract

In this paper we examine the impact of the lottery sales and the introduction of new lottery games on the retail activity using panel data on lottery sales, the adoption of new lottery games in West Virginia and in neighboring states, and retail income (a proxy for retail sales) for all 55 counties in West Virginia over the 1987-2001 period. Importantly, we are able to utilize changes in neighboring state lottery status to examine the potentially endogenous relationship between lottery sales and retail activity. Our findings generally show that lottery sales are positively associated with retail income, but perhaps surprisingly this positive effect is generated from interior counties and not border counties. We also find that the introduction of video lottery in several West Virginia counties has resulted in a significant increase in retail income.

Suggested Citation

  • Mark Skidmore & Mehmet Serkan Tosun, 2005. "Do New Lottery Games Stimulate Retail Activity? Evidence from West Virginia Counties," Working Papers 05-06, UW-Whitewater, Department of Economics.
  • Handle: RePEc:uww:wpaper:05-06
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    References listed on IDEAS

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    1. David Giacopassi & Mark W. Nichols & B. Grant Stitt, 2006. "Voting for a Lottery," Public Finance Review, , vol. 34(1), pages 80-100, January.
    2. Donald S. Elliott & John C. Navin, 2002. "Has Riverboat Gambling Reduced State Lottery Revenue?," Public Finance Review, , vol. 30(3), pages 235-247, May.
    3. Alm, James & McKee, Michael J. & Skidmore, Mark, 1993. "Fiscal Pressure, Tax Competition, and the Introduction of State Lotteries," National Tax Journal, National Tax Association, vol. 46(4), pages 463-476, December.
    4. Kearney, Melissa Schettini, 2005. "State lotteries and consumer behavior," Journal of Public Economics, Elsevier, pages 2269-2299.
    5. Alm, James & McKee, Michael J. & Skidmore, Mark, 1993. "Fiscal Pressure, Tax Competition, and the Introduction of State Lotteries," National Tax Journal, National Tax Association, vol. 46(4), pages 463-76, December.
    6. Garrett, Thomas A. & Marsh, Thomas L., 2002. "The revenue impacts of cross-border lottery shopping in the presence of spatial autocorrelation," Regional Science and Urban Economics, Elsevier, vol. 32(4), pages 501-519, July.
    7. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association, vol. 42(1), pages 89-93, March.
    8. Charles T. Clotfelter & Philip J. Cook, 1989. "Selling Hope: State Lotteries in America," NBER Books, National Bureau of Economic Research, Inc, number clot89-1.
    9. Clotfelter, Charles T & Cook, Philip J, 1990. "On the Economics of State Lotteries," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 105-119, Fall.
    10. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association, vol. 42(1), pages 89-93, March.
    11. Tosun, Mehmet Serkan & Skidmore, Mark, 2004. "Interstate Competition and State Lottery Revenues," National Tax Journal, National Tax Association, vol. 57(2), pages 163-178, June.
    12. Mark Edward Stover, 1990. "Contiguous state lotteries: Substitutes or complements?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 9(4), pages 565-568.
    13. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, January.
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    Cited by:

    1. repec:rri:wpaper:200507 is not listed on IDEAS
    2. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    3. Mark Skidmore & Mehmet Serkan Tosun, 2005. "Cross-Border Shopping and the Sales Tax: A Reexamination of Food Purchases in West Virginia," Working Papers 05-07, UW-Whitewater, Department of Economics.
    4. Andrés Leal & Julio López-Laborda & Fernando Rodrigo, 2010. "Cross-Border Shopping: A Survey," International Advances in Economic Research, Springer;International Atlantic Economic Society, pages 135-148.
    5. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: A Survey of the Literature," Working Papers 1109, College of the Holy Cross, Department of Economics.
    6. Leal, Andrés & López-Laborda, Julio & Rodrigo, Fernando, 2009. "Prices, taxes and automotive fuel cross-border shopping," Energy Economics, Elsevier, vol. 31(2), pages 225-234.
    7. repec:kap:iaecre:v:16:y:2010:i:2:p:135-148 is not listed on IDEAS

    More about this item

    Keywords

    Lottery; Regional Development;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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