Who Loves to Gamble? Socio-Economic Factors Determining Gambling Behaviour in Germany

Giebeler, Constanze and Rebeggiani, Luca (2019): Who Loves to Gamble? Socio-Economic Factors Determining Gambling Behaviour in Germany.

Abstract

The interest among academics and policy makers in the economics of Gambling has risen substantially. Changes in gambling regulation, the relevance of gambling generated (tax) revenues and the usefulness to other fields of economics, increased the interest in understanding gambling demand. The focus of this paper is to provide one of the first comprehensive analyses of gambling demand in Germany, by studying the socio-demographic and socio-economic factors which influence gambling expenditures using one of the largest data sets available, the official income and consumption survey (Einkommens- und Verbrauchsstichprobe). Applying models suitable for censored data, we identify the factors influencing gambling demand. Some findings are in line with the previous literature on gambling demand, others are quite surprising. They show that female household heads spend less on gambling than their male counterparts. The number of dependants in the household influences gambling behaviour negatively, while married couples have higher expenditures than single person households. We find that while gambling expenditures increase with the age of the household head, they do so at a diminishing rate. Income is also a strong determinant of gambling expenditure. Gambling expenditures rise with the household's income. We find no evidence that expenditures increase regressively. Furthermore, the education and occupation of the Household head influences gambling behaviour. A higher education has a negative effect on the propensity to gamble. We also find that households with privately employed household heads tend to spend more on gambling than those with unemployed or self-employed household heads. On the other hand, a household head who is a civil servant or retired has a positive effect. In contrast to previous literature, we find a negative effect of urbanity on household gambling expenditure. We discuss these and other results in the context of the theory of risk taking preferences and also with a focus on gambling regulation and taxation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Gambling, Consumer Demand, Risk and Uncertainty
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; L - Industrial Organization > L8 - Industry Studies: Services > L83 - Sports ; Gambling ; Restaurants ; Recreation ; Tourism

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