The Economic Winners and Losers of Legalized Gambling

Kearney, Melissa S.

doi:10.17310/ntj.2005.2.08

Cited by 42 publications

(27 citation statements)

References 23 publications

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“…Toll revenues are therefore on a par with lottery profits in terms of contribution to public coffers (Kearney, 2005). Operating authorities generally have the statutory authority to change tolls (at least within certain bounds).…”

Section: Sample Constructionmentioning

confidence: 99%

E-ZTAX: Tax Salience and Tax Rates^*

Finkelstein¹

2009

Quarterly Journal of Economics

447

129

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This paper tests the hypothesis that the salience of a tax system affects equilibrium tax rates.To do this, I analyze how toll rates change after toll facilities adopt electronic toll collection. Unlike manual toll collection, in which the driver must hand over cash at the toll collection plaza, electronic toll collection automatically debits the toll amount as the car drives through the toll plaza, thereby plausibly decreasing the salience of the toll. I find robust evidence that toll rates increase following the adoption of electronic toll collection. My estimates suggest that, in steady state, toll rates are 20 to 40 percent higher than they would have been without electronic toll collection. Consistent with the hypothesis that decreased tax salience is responsible for the increase in toll rates, I also find evidence that the short run elasticity of driving with respect to the actual toll declines (in absolute value) following the adoption of electronic toll collection. I consider a variety of alternative explanations for these results and conclude that these are unlikely to be able to explain the findings.Key Words: tax salience; size of government; tolls, electronic toll collection JEL Classification Codes: H11, H71, R48 I am grateful to Daron Acemoglu, David Autor, Raj Chetty, Peter Diamond, Liran Einav, Mike Golosov, Erzo Luttmer, Sean Nicholson, Ben Olken, Jim Poterba, Nancy Rose, Stephen Ryan, Monica Singhal, and seminar participants at Cornell, MIT, Berkeley, and Stanford GSB for helpful comments, to Julia Galef for outstanding research assistance, and to the innumerable employees of toll operating authorities around the country who generously took the time to provide data and to answer my many questions 1

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Section: Sample Constructionmentioning

confidence: 99%

E-ZTAX: Tax Salience and Tax Rates^*

Finkelstein¹

2009

Quarterly Journal of Economics

447

129

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“…In Cabazon (480 U.S. 203), the Court held that "state jurisdiction is pre-empted if it interferes or is incompatible with federal and tribal interests reflected in federal law." 15 Eadington (1999) and Kearney (2005) offer comprehensive reviews of the literature on the effects of casinos more generally. Some authors find evidence for a link among casinos, crime, and gambling addictions (Evans and Topoleski 2002;Gazel, Rickman, and Thompson 2001;Grinols andMustard 2001, 2006;Lorenz 2004).…”

Section: Key Hypothesesmentioning

confidence: 99%

Institutions and Casinos on American Indian Reservations: An Empirical Analysis of the Location of Indian Casinos

Cookson

2010

The Journal of Law and Economics

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This paper empirically investigates the institutional determinants of whether a tribal government invests in a casino. I find that the presence of Indian casinos is strongly related to plausibly exogenous variation in reservations’ legal and political institutions. Tribal governments that can negotiate gaming compacts with multiple state governments, because tribal lands span state borders, had more than twice the estimated probability (.77 versus .32) of operating an Indian casino in 1999. Tribal governments of reservations where contracts are adjudicated in state courts, rather than tribal courts, have more than twice the estimated probability (.76 versus .34) of investing in an Indian casino, ceteris paribus. These findings suggest that states’ political pressures and predictable judiciaries affect incentives to invest in casinos. This study contributes, more generally, to the empirical literature on the effects of institutions by providing new evidence that low-cost contracting is important for taking advantage of substantial investment opportunities.

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“…Both studies were conducted at the Greyhound bus station in Pittsburgh because it provides a constantly replenishing population of low-income individuals. Low-income individuals spend a higher percentage of their income on lottery tickets than do those with higher incomes (Brinner and Clotfelter 1975;Clotfelter and Cook 1989;Kearney 2005a;Livernois 1987;Spiro 1974;Suits 1977), 3 despite the fact that the negative expected value exerts a disproportionate adverse impact on their financial position. We discuss the implications of our results for deterring low-income populations from playing state lotteries.…”

Section: The Current Studymentioning

confidence: 99%