Almost universally outlawed in the early 20th century in the U.S., gambling has since been softened and legalized in many areas. Yet it remains popular as a form of leisure time activity in most countries. The question of whether gambling has positive or negative impacts on society is still unanswered.
The economic cost-benefit analysis method can be used to estimate the social costs of gambling. This approach, which is commonly employed in alcohol and drug research, is based on the idea that harms should be assigned value. It is important to note that this technique does not include the benefits of gambling. The economic cost-benefit analysis approach also includes harms to gamblers’ social networks.
This methodology has been used to estimate the socioeconomic impacts of pathological gambling. However, the effects of nonpathological gambling are often overlooked in these studies. Although these impacts are difficult to quantify, some of them are visible at the society/community level. These impacts include the loss of family and home, increased crime, and other intangible effects.
Other impacts of gambling are visible on the personal level. Some of these are cognitive biases and emotional stress. Some people who become problem gamblers report less effective work performance. It is estimated that approximately 60% of problem gamblers have been out of paid work for more than a month.
Adolescents’ gambling behavior ranges from occasional social gambling to excessive gambling. For some, gambling becomes a coping mechanism to deal with the stresses of school and home life. Others engage in gambling because they want to experience the thrill of winning money.
The economic cost-benefit analysis approach to gambling involves the study of gambling’s impacts on the public, on the economy, and on the individual. These impacts can be broken down into three categories: financial, social, and health. While the economic costs of gambling are easily quantified, the social and health impacts have been less well studied.
The financial impacts of gambling include gambling revenues, changes in financial situations, and infrastructure costs. Other impacts on the economic level include changes in tourism, employment, and productivity. The health impacts of gambling are physical health, mental health, and psychological health.
Some of these impacts can be positive, such as the psychological benefits of gambling. This can include improving self-concepts and enhancing the self-images of lower socioeconomic groups. It can also enhance senior citizens’ self-concepts.
Some other invisible costs of gambling are relationship problems. These are not obvious until the family member of the gambler seeks help. In addition, the adolescent gambler cannot lose their family, home, or spouse. Similarly, the recreational gambler’s health is generally better than that of the nongambler.
The social costs of gambling are defined by Walker and Barnett as “harm to no one”. They consider the social cost of gambling to be a nonmonetary one, but a monetary amount is not an accurate measure.
The economic cost-benefit analysis of gambling is a useful tool for policymakers to assess how to best promote the benefits of gambling. It can also be used to compare and contrast gambling policies. Ultimately, the aim of these studies is to determine which policies increase the benefits and reduce the costs of gambling.