Valuing Casinos as a Local Amenity


  • Michael Wenz

  • Michael Wenz is an Assistant Professor in the Department of Economics, Northeastern Illinois University, BBH 346-D, 5500 N. St. Louis Avenue, Chicago, IL 60625, USA. His e-mail address is:
  • JEL Codes: H7, J4, R1.


This paper employs a Rosen–Roback model to evaluate the bottom line impact of casinos on quality of life and on business productivity in their local area. This approach provides a large practical improvement over the cost–benefit accounting style approach that dominates previous research on casino impacts. Additionally, this study extends the literature by distinguishing among casino types and finds different effects associated with Native American gaming, isolated non-Native American gaming, and competitive gaming towns. Two-stage least squares estimation suggests that casinos of all types do very little to affect household quality of life in either direction, although Native American casinos and gaming towns have generated positive business productivity effects. Isolated non-Native American casinos have not generated productivity effects, but the analysis shows that they could generate positive productivity effects if they located in less densely populated areas and if they are of sufficient size.