Wednesday, March 31, 2010

The temptations of being abroad

Oscar Wilde was not alone in being able to resist anything but temptation. And if the sanctions that normally apply, whether legal or social, are absent then clearly there is a greater opportunity to party on, so to speak. This paper shows how the gambling behaviour of tourists depends on the legality of gambling in the home country.

When the Cat's Away, the Mice Will Play: Gambling Behaviour of Visitors in Australia Bin Dong, Benno Torgler
What happens if national legal laws or enforcements and social norms are no longer able to directly regulate individual behaviour? According to our knowledge, not much empirical evidence has emerged answering such a seemingly simple question. The challenge is to distinguish between the effects of social norm and of legal enforcement. One way to explore such a question in an almost natural quasi-experimental setting is to focus on tourists’ behaviour. Tourists are visiting another country for a relatively short period of time and are acting in a different (legal) environment where formal and informal rules are different to those found in their own country. Using data from Australia we focus on gambling activities since these are prohibited in some countries. We find that tourists from countries where gambling is prohibited spend a significantly larger share of their entertainment expenditure on gambling than those who come from countries where it is legalized.

1 comment:

Leigh Caldwell said...

There may be a simpler explanation. Do you think tourists from countries where prawns are expensive also eat more prawns in Australia?