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The hypothesis being tested was that
expenditure on EGMs would be higher in areas
with a high proportion of the population not
in the labour force.
Victorian Casino and Gaming Authority
Community Impact
Study: Empirical analysis of regional gaming
expenditure
154
Estimation methods used
The effects of the unemployment rate in each
area, and the number or proportion of nonworking
adults, were investigated using the panel data
with fixed effects and random effects
specifications. Since the disturbances were
found to be serially correlated with the
explanatory variables in the model, a
fixed-effects equation was also estimated using
an
autoregressive AR(2) estimator. Elasticities
were calculated using the parameters from the
AR(2) equation. The elasticity of gaming
expenditure with respect to the unemployment
rate
is a function of the unemployment coefficient
estimate, and of the parameters, phi1 (?1) and
phi2 (?2), on the first and second order
autoregressive error terms. This is explained in
greater detail in Section 4.
3.4.3 Social security data and estimation
methods used
Data
We investigated the hypothesis that spending on
gaming is heavily concentrated among
pensioners and unemployed persons. This was
achieved by incorporating social security
variables in different regressions.
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