The social aspect of gambling may be one of the main factors driving consumption. The social aspects of gambling venues provide consumers with the opportunity to interact with other people. While some consumers engage in gambling for the pure fun and excitement of winning money, others may use gambling as a way to avoid problems. Problem gamblers often exhibit both of these behaviors. Here are some examples of consumer motivations. To understand what motivates gambling, we should first understand how it affects society.
Social costs
The societal costs of gambling are difficult to estimate because of the lack of causal links between gambling and the harms experienced by the people involved. In some cases, the gambling problem is the result of life circumstances or disorders, not a direct effect of the activity. To compensate for this, most studies discount the costs by applying a causality adjustment factor. In 1999, the Australian Productivity Commission proposed an adjustment factor, which assumed that about 80% of problem gamblers would face the same costs if they did not engage in gambling.
These studies have highlighted that the societal costs of problem gambling are similar in Connecticut and Wisconsin, but differ in some ways. For example, costs related to unemployment, bad debts, and theft were the most comparable among both states. Despite these similarities, differences were observed in costs related to criminal justice systems and welfare. The differences, however, could be explained by the fact that Connecticut legalized gambling. Regardless of the cause, the social costs of gambling are significant.
Economic cost-benefit analysis
An economic cost-benefit analysis of gambling will include a number of variables, including the benefits and costs of the activity. The analysis will be based on the basic results of the impact model, as well as any secondary effects or uncertainties in parameters. The benefits will be categorized into four main categories: government revenue, consumer surplus, and capital gains. The costs and benefits will be categorized according to which of these variables is most important.
Intangible effects of gambling are hard to quantify, and as such, they are not accounted for in the standard economic cost-benefit analysis of gambling. The main reason why such studies are often inconclusive is because they ignore the character of the responses of the market to the casino. As a result, they are unable to estimate the net benefits of the business, because they fail to account for the displacement of local goods and services and the opportunity costs of lost jobs. While these issues are complex and difficult to quantify in dollar terms, environmental effects of gambling are beginning to become more tangible. The federal government even requires that casinos create a compensatory wetland.
Cost-benefit analysis of problem gambling
In the early 1990s, an Australian study estimated the societal costs of problem gambling. Other studies have replicated this work. It found that problem gambling costs 0.3 to 1.0% of the national GDP, which corresponds to 0.4-0.7% of GDP. These costs are high, but there are relatively few direct costs for prevention and treatment. An increased focus on prevention would reduce these high indirect and intangible costs. But what should be the exact cost of problem gambling intervention?
There are two primary methods of assessing the social costs of problem gambling. The first method emphasizes identifying the costs to society; the second focuses on estimating the costs. The latter method is less rigorous, since it focuses on social costs, such as lost productivity and criminal justice system costs. But the study also considers both social and economic costs and the impact of gambling access on the general population. Nevertheless, the most important methodological question is what to do about the costs of problem gambling.