Forecasting Nevada Gross Gaming Revenue and Taxable Sales Using Coincident and Leading Employment Indexes
46 Pages Posted: 27 Dec 2010 Last revised: 29 May 2014
Date Written: July 29, 2010
This paper provides out-of-sample forecasts of Nevada gross gaming revenue and taxable sales using a battery of linear and non-linear forecasting models and univariate and multivariate techniques. The linear models include vector autoregressive and vector error-correction models with and without Bayesian priors. The non-linear models include non-parametric and semi-parametric models, smooth transition autoregressive models and artificial neural network autoregressive models. In addition to gross gaming revenue and taxable sales, we employ recently constructed coincident and leading employment indexes for Nevada’s economy. We conclude that non-linear models generally outperform linear models in forecasting future movements in gross gaming revenue and taxable sales.
Keywords: Forecasting, Linear and Non-Linear Models, Nevada Gross Gaming Revenue, Nevada Taxable Sales
JEL Classification: C32, R31
Suggested Citation: Suggested Citation