Casinos, Crime and Community Costs
33 Pages Posted: 6 Oct 2000
Date Written: June 2000
Casino gaming - providing negative expected return with positive variance - has puzzled economists with respect to a number of issues, including the extent to which casinos are tied to externalities. In the case of tobacco, the link between use and health-related externalities has led to state lawsuits to recover social costs. This paper studies the connection between casinos and crime using county-level data for every US county between 1977 and 1996, spanning the introduction of casinos to states other than Nevada. We find that casinos increased crime after a lag. The data indicate that 8% of crime observed in casino counties in 1996 was attributable to casinos. The average annual cost of increased crime due to casinos was $65 per adult per year. Furthermore, by studying the crime rates in counties that border casinos host counties we show that casinos create crime, not merely move it from one area to another. If anything, the neighbor data indicate that casino crime spills over into the border counties rather than is moved from them. Last, we explain why other studies have sometimes failed to identify a link between casinos and increased crime rates.
Keywords: Casinos, Crime, Externalities, Social Cost, Pigouvian Taxes
JEL Classification: K0, K2, H2
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Using Electoral Cycles in Police Hiring to Estimate the Effect of Policeon Crime
The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports
By Lance Lochner and Enrico Moretti
The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation
Why Do so Many Young American Men Commit Crimes and What Might We Do About it?
Crime, Punishment, and the Market for Offenses
Crime Rates and Local Labor Market Opportunities In the United States: 1979-1997
By Eric D. Gould, Bruce A. Weinberg, ...
Why Do Increased Arrest Rates Appear to Reduce Crime: Deterrence, Incapacitation, or Measurement Error?
Identifying the Effect of Unemployment on Crime