Measuring displacement effects across gaming products: a study of Australian gambling markets

Lisa Farrell () and David Forrest

Applied Economics, 2008, vol. 40, issue 1, 53-62

Abstract: This article seeks to establish the extent of displacement effects across gaming products. This is a particularly difficult question to address with precision. To date, many studies have looked at policy changes such as the introduction of a new product into the market to assess the severity of displacement effects. However, simple before and after comparisons are invalid. One needs to know what the appropriate counterfactual would have been in the absence of the policy change - which by its very nature is unobservable. The alternative is to look at identical populations exposed to different regimes. Australia represents such a natural experiment. In Australia, Betting and Gaming legislation is determined at the state level, giving rise to some interesting differentials across states within a single country. This article estimates a state level (fixed effects) panel data model, exploiting the intra-state differences in the portfolio of gaming products available, to estimate the extent of displacement effects across the gaming sector. The results are particularly relevant to the current UK policy debate, which is focused on the potential impact on the existing market following a forthcoming, radical deregulation of the industry (with further liberalization proposed).

Date: 2008
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Citations: View citations in EconPapers (6)

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DOI: 10.1080/00036840701591379

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