How Windfall Income Increases Gambling at Poker Machines

Hielke Buddelmeyer and Kyle Peyton
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Hielke Buddelmeyer: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: In December 2008 and March-April 2009 the Australian Government used fiscal stimulus as a short-run economic stabilization tool for the first time since the 1990s. In May-June 2012, households received lump sum cheques as compensation for the introduction of the Carbon Tax scheduled for 1 July 2012. This paper examines the relationship between these financial windfalls and spending at electronic gaming machines (EGMs) using data from 62 local government areas in Victoria, Australia. The results show large increases in spending at EGMs during the periods when Australian households received economic stimulus cheques. Increased spending at EGMs in December 2008 amounted to 1% of the total stimulus for that period. We conclude that the 2008-2009 stimulus packages substantially increased gambling at EGMs in Victoria. We find no unexpected increase in spending at EGMs in the months when Carbon Tax compensation cheques were paid.

Keywords: Gambling; stimulus; Australia; windfall income; electronic gaming (search for similar items in EconPapers)
JEL-codes: E21 E62 H3 H5 L83 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2013-02
New Economics Papers: this item is included in nep-mac and nep-pbe
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