Many considerations relevant to the cost–benefit and impact analysis of one region are common to the analysis of others. This appendix constructs an example that considers the cost–benefit analysis of a regional casino, where the focus is the economic impact and cost–benefit relevant to the county containing the casino. The county is a subset of the area that would be affected by the presence of the casino; therefore, its costs and benefits are a portion of the totals.

The innermost shaded circle in Figure A.1 represents a city of approximately 200 square miles (8-mile radius) with population density of 1,800 per square mile, which is not untypical for cities in the United States. This implies a city population of 361,911. The next circle, with a 25-mile radius, represents the county. Its population density is fifty people per square mile, which is also representative. We assume that there is a city 150 miles away in a neighboring state that has a population of 300 thousand. The solid vertical line in Figure A.1 represents the border and the dashed vertical line is the midpoint line between the two cities. The outermost circle has a radius of 250 miles. It represents the effective limit of demand for the casino located in the center. Individuals farther away have more attractive opportunities elsewhere. We assume that the population density outside the county is forty people per square mile, not counting the neighboring city.