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Do Slot Machines Cause Bankruptcy? A Regulatory Natural Experiment with Exogenous Changes to Slot Locations

Author

Listed:
  • Barry Scholnick
  • Hyungsuk Byun
Abstract
Ackerlof and Shiller (2015), and many others, argue that slot machines are manipulative and deceptive. We examine whether the removal of slots from a specific bar or restaurant impacts bankruptcy filings in the immediate vicinity. Our identification strategy compares consumers that are fractions of a kilometer from the closed slot location, compared to consumers slightly further away. We find that the removal of slots from a bar or restaurant significantly reduces the number of neighboring bankruptcies. These effects are dependent on the dollar amount of gambling removed from each location, as well as the distance from the location.

Suggested Citation

  • Barry Scholnick & Hyungsuk Byun, 2016. "Do Slot Machines Cause Bankruptcy? A Regulatory Natural Experiment with Exogenous Changes to Slot Locations," ERSA conference papers ersa16p607, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa16p607
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    References listed on IDEAS

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    More about this item

    Keywords

    neighborhood disamenities; slot machines; bankruptcy;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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