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Socio Economic Impact of
Gambling in Context
Brad R. Humphreys
University of Alberta
Department of Economics
SEIG Studies …
The Need for SEIG Studies
• Gambling is a widespread economic
activity
• Regulators and the public and need clear
answers to important questions …
• “What is the effect of gambling on our
province?”
• “How much gambling is the `right’
amount?”
SEIG and Social Accounting
• SEIG studies are applications of social
accounting
• Decades of research have been devoted
to the development of social accounts
• Systems of social accounting solved many
of the problems that plague SEIG studies
decades ago
Principles of Social Accounting
• Don’t count things more than once
• Think carefully about placing activities in
categories
• You can’t measure everything
• Many things that can be measured
cannot be measured in a way that makes
sense in the context of social accounting
Examples of Social Accounts
• Canada: National Income and Expenditure
Accounts
• US: National Income and Product Accounts
• UK: National Income, Expenditure and
Product Accounts
Systems vs. Results
System
• Arithmetic
• Nat. Product Account
Example of Result
• 2+2=4
• GDP
Uses of Social Accounts
• Provide decision makers and the public with
reliable information about economic activity
• Generated by an internally consistent system,
so users can have confidence that the
numbers “mean” something
• Forces us to recognize that not everything can
be measured in the context of a social
accounting system
The Development of Social Accounts
The Development of Social Accounts
• The Great Depression showed that economic
policy makers did not know what was going on
in the economy – needed better information
• After 20 years of research, social accounting
systems began to emerge (e.g. NIPA)
• Developed an internally consistent method for
measuring economic activity
• Note that social accounting systems did not
simply utilize existing data
SEIG vs. Social Accounting
• Existing SEIG frameworks
– Developed without reference to social accounting
methods, make no mention of these methods
– Not currently based on internally consistent social
accounting principals
– Commit mistakes that well designed systems of
social accounts avoid
– Amount to laundry lists of the parts of society
affected by gambling
Problems with SEIG
• Fail to recognize that everything that can be
measured cannot be measured in a way that
generates a useful, consistent metric
• Invite quantification of every item on the
laundry list
• Invite “psuedo cost benefit” analysis
• Invite inappropriate comparison across studies
An Example
• Anielski [“The Socio-Economic Impact of
Gambling (SEIG) Framework” 2008] identifies
“Government regulatory costs (government
expenditures) related to gambling industry”
“Provincial government public accounts”
Problems With This
• Suggests that the AGLC budget can be used to
determine the regulatory costs of gambling in
the province
• It cannot – agency budgets are unsuitable for
estimating these costs
• The operation of AGLC generates benefits for
gamblers and non-gamblers in Alberta
Social Accounting Systems
SEIG
Good Things About SEIG
• Some (good) information is better than no
information [but bad information may not]
• Comprehensive
• Can inform us about many important
relationships between gambling and society
• Allows the reader to use personal judgment
and values to determine the overall impact of
gambling on society
Where Do We Go From Here?
• Must recognize the flaws with existing SEIG
frameworks – this has been pointed out
before but ignored
• Must recognize the tension between the
questions that policy makers and the public
want answered and the way academics do
research
• Need to determine if SEIG can be salvaged
before doing any additional SEIG studies