A policy-oriented framework for social cost analysis of gambling: Evidence from the Czech Republic

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dc.contributor.authorZofcak, Jakub
dc.contributor.authorStroukal, Dominik
dc.contributor.authorSima, Josef
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2024-12-03T11:22:14Z
dc.date.available2024-12-03T11:22:14Z
dc.description.abstractThis paper introduces a new framework for calculating the social costs of gambling, distinguishing between private costs, externalities, and public expenditures. By focusing only on externalities and public expenditures, which are relevant to policy-making, this approach aligns with economic theory and allows for a more targeted political response. The practical application of this framework is demonstrated by calculating the social cost of gambling in the Czech Republic in 2022 using the best available data. Our findings estimate private costs to be between CZK 91.1–102.3 billion (Lie/bet scale) or CZK 89.3–105.0 billion (PGSI scale), externalities between CZK 2.6–4.8 billion or CZK 2.2–5.3 billion, and public expenditures between CZK 5.6–8.0 billion or CZK 9.6–12.1 billion (exchange rate 1 EUR = 24.48 CZK). However, quality of the calculation is heavily dependent on the quality of data and in our case serves as a practical application of the new framework. Private costs thus make the most of the total costs, but the externalities and the public expenditures are not negligible. The framework’s novel approach addresses long-standing flaws in the traditional calculations of gambling’s social costs. It proposes a division of total impacts into three distinct categories, allowing for a methodological unification and introducing rationality to political decision-making concerning gambling. By isolating externalities, private and public expenditures, this paper pioneers a pragmatic economic approach to policy intervention aimed at mitigating the social harm of gambling not reflected in its market price. Future research should incorporate this framework into regulatory impact assessments for gambling policies, which could significantly improve their quality. The study’s main limitation is the lack of Czech-specific and overall better-fitted data, especially on the psychological effects of gambling. Future research should improve data collection and consider not only the costs but also benefits of gambling to help to produce more comprehensive policy assessments.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2024-5-019
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.urihttps://dspace.tul.cz/handle/15240/175627
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectGambling economicsen
dc.subjectsocial cost analysisen
dc.subjectpublic policy impacten
dc.subjectexternalitiesen
dc.subjectregulatory impact assessmenten
dc.subject.classificationD62
dc.subject.classificationH23
dc.subject.classificationI18
dc.subject.classificationL83
dc.titleA policy-oriented framework for social cost analysis of gambling: Evidence from the Czech Republicen
dc.typeArticleen
local.accessopen
local.citation.epage72
local.citation.spage54
local.facultyFaculty of Economics
local.filenameEM_4_2024_4
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue4
local.relation.volume27
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