The Effect of Gambling on Saving Behaviour in Australia

Abstract

Although gambling can be a form of entertainment for some, it is commonly associated with social, psychological, financial, and physical harm. To reduce the adverse effects of gambling, it is important to examine the implications of gambling for policy formulation. In this study, we examine the causal impact of gambling on savings behaviour using a sample of gamblers from Australian household panel data for the period of 2015 and 2018. Our results show that gambling is associated with poor savings behaviour. This result is robust to different measures of gambling, eight different sub-groups and four gambling risk statuses. Our mediation results show that social capital and locus of control are mechanisms through which gambling influences saving behaviour.