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Do Casinos Really Cause Crime?

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  • Douglas M. Walker

Abstract

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.

Suggested Citation

  • Douglas M. Walker, 2008. "Do Casinos Really Cause Crime?," Econ Journal Watch, Econ Journal Watch, vol. 5(1), pages 4-20, January.
    • Handle: RePEc:ejw:journl:v:5:y:2008:i:1:p:4-20
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    References listed on IDEAS

    as
    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. Grinols,Earl L., 2004. "Gambling in America," Cambridge Books, Cambridge University Press, number 9780521830133, October.
    3. Phillip Arestis & Michelle Baddeley & John S.L. McCombie (ed.), 2007. "Economic Growth," Books, Edward Elgar Publishing, number 3958.
    4. Earl L. Grinols & David B. Mustard, 2006. "Casinos, Crime, and Community Costs," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 28-45, February.
    5. Douglas M. Walker, 2007. "Problems in Quantifying the Social Costs and Benefits of Gambling," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(3), pages 609-645, July.
    6. 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.
    7. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    8. 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.
    9. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Falls, Gregory A. & Thompson, Philip B., 2014. "Casinos, casino size, and crime: A panel data analysis of Michigan counties," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 123-132.
    2. Humphreys, Brad R. & Marchand, Joseph, 2013. "New casinos and local labor markets: Evidence from Canada," Labour Economics, Elsevier, vol. 24(C), pages 151-160.
    3. 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.
    4. Robert Whaples, 2009. "The Policy Views of American Economic Association Members: The Results of a New Survey," Econ Journal Watch, Econ Journal Watch, vol. 6(3), pages 337-348, September.
    5. Douglas M. Walker & John D. Jackson, 2008. "Market‐based “disaster relief”: Katrina and the casino industry," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 35(7), pages 521-530, June.
    6. Daniel Montolio & Simón Planells, 2013. "Does tourism boost criminal activity? Evidence from a top touristic country," Working Papers 2013/4, Institut d'Economia de Barcelona (IEB).
    7. William S. Reece, 2010. "Casinos, Hotels, And Crime," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 145-161, April.
    8. Daniel Montolio & Simón Planells, 2013. "Does tourism boost criminal activity? Evidence from a top touristic country," Working Papers 2013/4, Institut d'Economia de Barcelona (IEB).
    9. Man-Keung Kim & Arwin Pang & Wei Bao & Ryan Bosworth, 2016. "Endogeneity in Casino Revenue and Crime Rates: The Case of Las Vegas, Nevada," The Review of Regional Studies, Southern Regional Science Association, vol. 46(3), pages 223-236, Winter.
    10. Douglas M. Walker, 2010. "Casinos and Crime in the USA," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 19, Edward Elgar Publishing.

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    More about this item

    Keywords

    casinos; crime;

    JEL classification:

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

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