Legal Gambling and Crime: Evidence from EGMs in Alberta

نویسندگان

  • Brad R. Humphreys
  • Yang Seung Lee
چکیده

Empirical evidence about the relationship between legal gambling and crime is mixed; some studies find that legalized gambling increases crime and others find no relationship between legalized gambling and crime, controlling for other factors like hotels. We develop a utility maximizing model of time spent in legal work, crime, and leisure and use this model to understand the relationship between crime and legal gambling opportunities. Our model assumes that a potential criminal is risk-neutral and always prefers more income when making time allocation decisions. The opportunity cost of crime changes with perceptions of the probability of winning when gambling. Empirically, we examine the relationship between legal gambling (Casino and VLTs) and nine types of crime in communities in Alberta, using a panel data approach. The results supporting the idea that that opportunity costs actually affect crime, and that the introduction of legal gambling can increase some crime rates and decrease others. JEL Codes: K42, L83, J22

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تاریخ انتشار 2010