IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-03h70001.html
   My bibliography  Save this article

The Importance of Self-Selection in Casino Cannibalization of State Lotteries

Author

Listed:
  • Jonathan Rork

    (Vassar College)

  • Stephen Fink

    (Vassar College)

Abstract

This note extends the work of Elliott and Navin (2002) on the substitutability of commercial casinos and state lotteries by controlling for a potential negative selection bias. We utilize a Heckman two-step selection correction in which our first stage probit involves whether or not a state has legalized commercial casinos. Results indicate that a $1 increase in state casino tax revenue will reduce net lottery proceeds by $0.56. This estimate is 33% smaller than what has been found in other studies, which is consistent with a negative selection bias.

Suggested Citation

  • Jonathan Rork & Stephen Fink, 2003. "The Importance of Self-Selection in Casino Cannibalization of State Lotteries," Economics Bulletin, AccessEcon, vol. 8(10), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-03h70001
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2003/Volume8/EB-03H70001A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alm, James & McKee, Michael J. & Skidmore, Mark, 1993. "Fiscal Pressure, Tax Competition, and the Introduction of State Lotteries," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(4), pages 463-476, December.
    2. Gary C. Anders & Donald Siegel & Munther Yacoub, 1998. "Does Indian Casino Gambling Reduce State Revenues? Evidence From Arizona," Contemporary Economic Policy, Western Economic Association International, vol. 16(3), pages 347-355, July.
    3. Donald S. Elliott & John C. Navin, 2002. "Has Riverboat Gambling Reduced State Lottery Revenue?," Public Finance Review, , vol. 30(3), pages 235-247, May.
    4. Charles T. Clotfelter & Philip J. Cook, 1989. "Selling Hope: State Lotteries in America," NBER Books, National Bureau of Economic Research, Inc, number clot89-1.
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Melissa S. Kearney, 2005. "The Economic Winners and Losers of Legalized Gambling," NBER Working Papers 11234, National Bureau of Economic Research, Inc.
    2. Hasret Benar & Glenn Jenkins, 2006. "Regulation And Taxation Of Casinos Under State-monopoly, Private Monopoly And Casino Association Regimes," Working Paper 1056, Economics Department, Queen's University.
    3. Hasret Benar & Glenn Jenkins, 2008. "The economics of casino taxation," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 63-73.
    4. Will E. Cummings & Douglas M. Walker & Chad D. Cotti, 2017. "The Effect Of Casino Proximity On Lottery Sales: Evidence From Maryland," Contemporary Economic Policy, Western Economic Association International, vol. 35(4), pages 684-699, October.
    5. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    6. Douglas M. Walker & John D. Jackson, 2008. "Do U.S. Gambling Industries Cannibalize Each Other?," Public Finance Review, , vol. 36(3), pages 308-333, May.
    7. Brown, Ryan P. & Rork, Jonathan C., 2005. "Copycat gaming: A spatial analysis of state lottery structure," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 795-807, November.
    8. Mark W. Nichols & Mehmet Serkan Tosun & Jingjing Yang, 2015. "The Fiscal Impact of Legalized Casino Gambling," Public Finance Review, , vol. 43(6), pages 739-761, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ebl:ecbull:v:8:y:2003:i:10:p:1-8 is not listed on IDEAS
    2. Skidmore, Mark & Serkan Tosun, Mehmet, 2008. "Do New Lottery Games Stimulate Retail Activity? Evidence from West Virginia Counties," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(1), pages 1-11.
    3. Brown, Ryan P. & Rork, Jonathan C., 2005. "Copycat gaming: A spatial analysis of state lottery structure," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 795-807, November.
    4. Garrett, Thomas A. & Coughlin, Cletus C., 2009. "Inter–Temporal Differences in the Income Elasticity of Demand for Lottery Tickets," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(1), pages 77-99, March.
    5. Peter Calcagno & Douglas Walker & John Jackson, 2010. "Determinants of the probability and timing of commercial casino legalization in the United States," Public Choice, Springer, vol. 142(1), pages 69-90, January.
    6. Thomas A. Garrett & Russell S. Sobel, 2004. "State Lottery Revenue: The Importance of Game Characteristics," Public Finance Review, , vol. 32(3), pages 313-330, May.
    7. Cletus C. Coughlin & Thomas A. Garrett & Ruben Hernandez-Murillo, 2004. "Spatial probit and the geographic patterns of state lotteries," Working Papers 2003-042, Federal Reserve Bank of St. Louis.
    8. Thomas A. Garrett & Gary A. Wagner, 2004. "State government finances: World War II to the current crises," Review, Federal Reserve Bank of St. Louis, vol. 86(Mar), pages 9-25.
    9. Thomas A. Garrett & Natalia A. Kolesnikova, 2010. "Local price variation and the tax incidence of state lotteries," Working Papers 2010-035, Federal Reserve Bank of St. Louis.
    10. Will E. Cummings & Douglas M. Walker & Chad D. Cotti, 2017. "The Effect Of Casino Proximity On Lottery Sales: Evidence From Maryland," Contemporary Economic Policy, Western Economic Association International, vol. 35(4), pages 684-699, October.
    11. Douglas M. Walker & John D. Jackson, 2008. "Do U.S. Gambling Industries Cannibalize Each Other?," Public Finance Review, , vol. 36(3), pages 308-333, May.
    12. 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.
    13. 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.
    14. Thomas A. Garrett, 2011. "A closer look at the tax incidence of instant lottery games: an analysis by price point," Working Papers 2011-010, Federal Reserve Bank of St. Louis.
    15. David Giacopassi & Mark W. Nichols & B. Grant Stitt, 2006. "Voting for a Lottery," Public Finance Review, , vol. 34(1), pages 80-100, January.
    16. 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.
    17. Lutter, Mark, 2011. "The adoption of lotteries in the United States, 1964 - 2007. A model of conditional and time-dynamical diffusion," MPIfG Discussion Paper 11/4, Max Planck Institute for the Study of Societies.
    18. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    19. Melissa S. Kearney, 2005. "The Economic Winners and Losers of Legalized Gambling," NBER Working Papers 11234, National Bureau of Economic Research, Inc.
    20. Yolanda Kodrzycki, 1994. "Privatization of local public services: lessons for New England," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 31-46.
    21. Douglas M. Walker & Todd M. Nesbit, 2014. "Casino Revenue Sensitivity to Competing Casinos: A Spatial Analysis of Missouri," Growth and Change, Wiley Blackwell, vol. 45(1), pages 21-40, March.

    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-03h70001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.