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Abstract

This study estimates the impact of casino entrance in adjacent counties on aggregate and selected subsector incomes on counties adjacent in Indiana from 1990 to 2008. Employing a spatial econometric model and an approach that combines pre-casino entrance forecasts and actual income changes, this study finds very modest increases in income growth in casino counties in the econometric model but adjacent county income declines which are economically irrelevant. The forecast approach mirrors, with less precision, this finding. These findings suggest that welfare effects of casinos are more geographically distributed than the literature has yet reported primarily because of the redistribution of retail trade.