Do Casinos Cause Economic Growth?

15 Pages Posted: 8 Dec 2007

See all articles by Douglas M. Walker

Douglas M. Walker

College of Charleston - School of Business and Economics

John D. Jackson

Auburn University - Department of Economics

Abstract

Casino gambling is a popular form of entertainment and is purported to have positive effects on host economies. The industry surely affects local labor markets and tax revenues. However, there has been little evidence on the effects of casino gambling on state economic growth. This paper examines that relationship using Granger-causality analysis modified for use with panel data. Our results indicate that there is no Granger-causal relationship between real casino revenues and real per capita income at the state level. The results are based on annual data from 1991 to 2005. These findings contradict an earlier study that found that casino revenues Granger-cause economic growth, using quarterly data from 1991 to 1996. Possible explanations for the differences in short- and long-run effects are discussed.

Suggested Citation

Walker, Douglas M. and Jackson, John Douglas, Do Casinos Cause Economic Growth?. American Journal of Economics and Sociology, Vol. 66, No. 3, pp. 593-607, July 2007. Available at SSRN: https://ssrn.com/abstract=1061810 or http://dx.doi.org/10.1111/j.1536-7150.2007.00528.x

Douglas M. Walker (Contact Author)

College of Charleston - School of Business and Economics ( email )

Charleston, SC
United States

John Douglas Jackson

Auburn University - Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States

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