CHAPTER SUMMARY. The demonstration in Chapter 5 that the benefits of casinos are described by profits, taxes, distance consumer surplus, consumer surplus, induced capital gains, and elimination of transactions constraints, if any, may surprise some who expected to see jobs (“economic development”) figure prominently in the discussion. This chapter elaborates and expands our discussion of economic benefits, followed by numerical estimates. Here, we estimate the benefits of casino expansion in three ways: by using economic theory to construct a bound for measuring benefits using information on how much consumers gamble when they are different distances from the casino; by applying the bound to a rule of thumb about how casino demand drops off with distance; and by simulating the gambling choices of a representative consumer. The three estimates produce similar answers, giving us confidence in the estimates.

VALUE ONCE AGAIN

SUMMARY. Consumers value things that improve their well-being. The benefits in a cost–benefit analysis are the identifiable components of anything that leads to the consumer's improvement in well-being. In the case of casinos, the main benefit to expansion is the value to consumers of closer proximity to casinos.

For a short time in the 1980s, there was a rage surrounding “pet rocks.” Customers at retail store checkout counters could find ordinary field stones for sale.