Government restrictions and the demand for casino and parimutuel wagering

Growth in casino wagering in the United States from the mid-1980s forward has been extraordinary. Over the same period, however, parimutuel wagering has declined. Concern for this decline has prompted a number of states to allow parimutuel racetracks to offer casino-type gaming devices at their facilities. Such operations are commonly referred to as ‘racinos’. If the gaming devices at a racino are under the auspices of a state lottery, they are referred to as video lottery terminals (VLTs). Separate parimutuel and VLT wagering demand models were estimated for a racino facility. A number of restrictions were imposed on the VLT's at the beginning of the study period including: number of VLT's, type of game and machine, maximum bet per play and VLT location. The effect of these restrictions on VLT and parimutuel handles was a major focus of this article. Also of importance was an examination of the relationship between the VLT and parimutuel products. Relaxation of government restrictions on the VLT's was found to have resulted in a large increase in VLT wagering. On the other hand, parimutuel wagering was found to decrease with the relaxation of restrictions on the VLT's. The presence and growth of the VLT product was found to decrease parimutuel handle. The presence and growth of the parimutuel product was found to increase VLT handle.     

The UK demand for steel

The paper suggests a short-run model of the demand for steel that may be used for forecasting future trends. The paper commences with consideration of a long-run model which is estimated using cointegration analysis. An error correction model is then developed to depict the short-run movements to equilibrium. This can be used for the purpose of ex-post forecasting.     

The demand for tax haven operations

What types of firms establish tax haven operations, and what purposes do these operations serve? Analysis of affiliate-level data for American firms indicates that larger, more international firms, and those with extensive intrafirm trade and high R and D intensities, are the most likely to use tax havens. Tax haven operations facilitate tax avoidance both by permitting firms to allocate taxable income away from high-tax jurisdictions and by reducing the burden of home country taxation of foreign income. The evidence suggests that the primary use of affiliates in larger tax haven countries is to reallocate taxable income, whereas the primary use of affiliates in smaller tax haven countries is to facilitate deferral of U.S. taxation of foreign income. Firms with sizeable foreign operations benefit the most from using tax havens, an effect that can be evaluated by using foreign economic growth rates as instruments for firm-level growth of foreign investment outside of tax havens. One percent greater sales and investment growth in nearby non-haven countries is associated with a 1.5 to 2% greater likelihood of establishing a tax haven operation.     

The transactions trust demand for money

An exchange economy using gold as a means of payment is considered where it is possible to borrow gold in a money market. A positive money rate of interest is encountered as the shadow price of the capacity constraint in an economy without enough gold. The meaning of enough gold and the role of the default penalty are noted in the determination of the interest rate.Revised from Enough Gold in a Society Without and With Moneylenders, CFDP No. 753. The author gratefully acknowledges the support of the Aequus Institute.     

The derived demand for knowledge*

ABSTRACT

This paper calls attention on the effects of the economic properties of knowledge on its derived demand, an issue that has not received enough attention in the literature. The results of the analysis suggests that, because of the idiosyncratic – Arrovian – properties of knowledge, a chain of effects takes place: (i) in downstream markets the price of goods that have been produced using knowledge as an intermediate good, falls, (ii) consequently the derived demand in upstream knowledge markets – both within corporations and by them to knowledge-intensive business services – has a lower position, and (iii) the price of knowledge is lower than it should be were knowledge a standard good traded in competitive markets, (iv) with negative consequences in terms of adverse selection of large scale high quality research projects, but (v) possible compensating effects stemming from the use of knowledge spillovers to generate cheaper knowledge. Such results have important implications for economic policy discussions and decisions.     

The demand for money in Austria

In this paper, the demand for real money M1, M2, and M3 is estimated for Austria over the time period 1965–96. The modelling takes place within the framework of a small vector autoregression. To estimate the demand for money, two-equation error-correction models are constructed, which contain the short-run dynamics and the long-run economic equilibrium. It is found that a stable money demand exists for all monetary aggregates. The long-run equilibrium of M1, after accounting for a structural break in 1979, can be characterised as a classical type of money demand, with no interest rate effects and an elasticity of one for real GDP. In the case of M2 and M3, we find a unit coefficient on income and a significantly negative influence of a long-term interest rate. The statistical properties of the estimated short-run money demand equations – considering in-sample and out-of-sample tests – are generally very good. First version received: October 1996/Final version received: April 2000     

The demand for preventive medical care

The idea that people invest in health capital is an essential part of models of the demand for health, but the investment motives behind health decision are often obscured by other factors. This empirical paper investigates the demand for adult preventive medical care, where the investment motives are relatively clear cut. Several important results demonstrate the usefulness of the approach. First, the analysis finds that annual use of two preventive services decreases with age. Although not the only plausible explanation, the results are consistent with individuals shortens over the lifecycle. Second, schooling is found to be an important determinant of demand, with the more educated much more likely to use the services. Neither lifecycle nor schooling effects are consistently found in studies of the demand for culture care. Finally, the empirical analysis also provides additional evidence on the responsiveness of the demand for preventive care to change in insurance coverage, an important issue for health policy.     

Market structure and casino taxation in tourist resorts

This article examines the association of tax effects with market structure for casino gaming. We show that if market structure is uncompetitive, much of casino taxation falls on tourists whose demand is inelastic relative to supply. The tax is likely to be efficient under strong external demand if imposed on oligopoly casinos with a monopoly location in a cross-border market. The likelihood of economically ‘good’ taxation is greater under oligopoly than under competition but lower than under monopoly. Casino taxes should be lowered in a more competitive market with weaker external demand. Our prediction is consistent with the evidence found from casino tourism development in Macao with ‘high’ gambling taxes.     

Table games,slot machines and casino revenue

The main focus of this study is to assess the influence of table games on slot machine and total casino revenues. The subjects of the analysis are 24 rierboat casinos in the midwestern states of Illinois, Iowa and Missouri and three racinos in Iowa. A racino is a parimutuel racetrack which also offers slot machine gaming to its customers. Two econometric models were developed, one for slot machine revenue and one for total (slot machine plus table game) revenue at riverboats and racinos. Of particular interest is the effect on slot machine and total revenue of adding table games to the gaming operation. Slot machine revenue was found to increase with the number of slot machines and decrease with the number of table games. Slot machine revenue was estimated to decrease by 11.5% in the presence of 40 table games, the mean number of table games over the sample. Total win was found to increase with an increase in both slot machines and table games. The elasticity of total win with respect to the number of slot machines and table games was estimated to be 0.786 and 0.219, respectively. Total revenue was estimated to increase by 24.5% for an additional 40 table games.     

The disaggregated demand for labour in Greek industry

This paper employs the Granger test to examine the causal relationship between growth in the money supply and inflation for the US over the period 1959 to 1986. Alternative procedures, including both statistical search and non–statistical ad hoc methods, are utilized to determine the order of the bivariate distributed lag models used in implementing the test. In general, the results show feedback between movements in the money supply and price level changes. Unlike the results of Thornton and Batten (1985), one of the ad hoc methods for lag–length determination is found to perform somewhat better than the statistical search methods in correctly assessing the causal relationships involving money growth and inflation.     

The demand for alcohol in the United Kingdom

Using the AIDS model, we show that there exists for the UK a stable long-run relationship between expenditure shares on beer, cider, spirits and wine, alcohol prices, total alcohol expenditure and a range of non-economic variables relating to advertising, licensing, the employment, social class and demographic characteristics of consumers, and climate. Our estimates of key price and income elasticities generally lie between those found from other time-series studies (which exclude most of these non-economic variables) and those found from cross-section studies (which generally include them). However, the restrictions required for separability, homegeneity and symmetry (although not those for perfect price aggregation) are decisively rejected.     

The demand for urban water by customer class

Reduced-form wage and employment equations derived from a bargaining model are estimated using the two-step method proposed by Engle and Granger (1987 Econometrica, 55, 251-276). Wages and employment arinfluenced by varriables which determine profits on the one hand, and the utility of the union on the other hand. In addition, bargaining power appears to matter. Union strength was discovered to have a positive effect on both wages and employment in the manufacturing industry. The a positive effect on both wages and employment in the manufacturing industry. The two-step method made it possible to evaluate both the long-run elasticities and shortrun adjustment. Step response functions indicate that adjustment is not particularly slow in general. This papers to be true for wages but especially for employment. Hence, if the actual real-wage-employment combination is considered inappropriate, it is not primarily due to ‘too slow’ adjustment. Rather, it implies that the equilibrium is inappropriate.     

The demand for pay service on cable television

A probability model is developed for consumer choice among three television programming options, free over-the-air television, basic cable television service, and pay cable serve which consists of basic service plus a single channel of premium entertainment programming. Estimating equations for the demand for pay service are derived from the probability model and then estimated by applying regression techniques to data from a large sample of U.S. cable systems. The estimated parameters of the demand equation show that the demand for pay service is affected by the prices charged for both basic and pay service, by demographic characteristics of the households served by a cable system, and by the quality of programming offered on both basic and pay services. The demand estimates suggest that the introduction of pay service has substantially enhanced the likelihood of profitable operation for cable systems in major television markets.     

The supply of and demand for accounting information

The article analyzes the use of accounting information in Russia. We assess reporting behaviour in the lending process for a sample of Russian companies in the years 1999–2004 and postulate that Russian companies manage their earnings in order to avoid showing losses when applying for bank financing. Once a credit has been granted, companies are predicted to manage earnings because of the bank's monitoring activities. By means of univariate and multivariate analysis we are able to attribute the discontinuity around a zero target in the earnings distribution with firms’ response to the banks’ assessment of accounting performance. This implies that financing considerations affect the reporting incentives of Russian companies.     

The consumer's demand for diversity

The consumer's demand for diversity is measured either by the entropy or by the Hirschman-Herfindahl index of the budget shares. This notion, including the income elasticity of the demand for diversity, is applied to per capita consumption data of 30 countries.