A generalized double-hurdle model of Swedish gambling expenditures

This article estimates the relationship between demand for Swedish gambling, income and the other socioeconomic variables using empirical models of participation and gambling expenditure. It also indirectly attempts to account for the effect of a recent recession on gambling behaviour by examining g...

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Bibliographic Details
Published in:Applied economics 2014-12, Vol.46 (34), p.4151-4163
Main Authors: Rude, James, Surry, Yves, Kron, Robert
Format: Article
Language:English
Subjects:
censored data
Decision making
Decision making models
Economic models
Economics
Elasticity
Empirical research
Expenditure
Gambling
Human behaviour
hurdle model
inverse hyperbolic sine transformation
Nationalekonomi
Recession
Recessions
Socioeconomic factors
Studies
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Summary:This article estimates the relationship between demand for Swedish gambling, income and the other socioeconomic variables using empirical models of participation and gambling expenditure. It also indirectly attempts to account for the effect of a recent recession on gambling behaviour by examining gambling behaviour when the economy was growing versus the period immediately after a major recession. The aim of the article is to analyse the factors influencing gambling decisions. This is done using the double-hurdle method adjusted for the problems of heteroscedasticity and nonnormality using an approach that can handle extreme values and address skewness. The empirical results ruled out Tobit-type models and normally distributed double-hurdle models. The pattern on income elasticities across income classes implies that implicit Swedish gaming taxes are regressive. Income elasticities become smaller after the recession and the decision to participate changed with respect to the several of the demographic variables.
ISSN:0003-6846
1466-4283
1466-4283
DOI:10.1080/00036846.2014.939376