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CASINOS, HOTELS, AND CRIME

Authors

  • WILLIAM S. REECE

    1. Professor, Department of Economics, College of Business and Economics, West Virginia University, PO Box 6025, Morgantown, WV 26506-6025. Phone (304) 293-4039, Fax (304) 293-5652, E-mail william. reece@mail.wvu.edu
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      Without implicating them in any of the results, the author thanks Craig Depken, Earl Grinols, Rich Harrill, Brad Humphreys, Peter Leeson, David Mustard, Santiago Pinto, Russell Sobel, William Trumbull, seminar participants at the Alfred P. Sloan Foundation Travel and Tourism Industry Center at the University of South Carolina, and three anonymous referees for helpful and generous comments on earlier drafts.


Abstract

This paper examines the links among casinos, hotels, and crime using Indiana's counties for 1994-2004. In estimating casinos' impacts, I introduce a measure of casino activity in addition to variables related to the timing of casino opening. I test whether or not the number of hotel rooms affects crime rates. Increased casino activity reduces crime rates except for burglary, where crime rates rise after a lag. Leaving out a measure of casino activity appears to create a serious specification error. Finally, including problem crime data plagued by incomplete reporting affects the estimated impact of casinos on crime. (JEL R11, L83)

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