Casino Revenues and Retail Property Values: The Detroit Case

Jonathan A. Wiley and Douglas M. Walker

Online First™, 12 March 2009

Abstract

We analyze the effects of commercial casinos on retail property values in the Detroit urban area. Accounting for property characteristics and proximity to the casinos, casinos are found to have a significantly positive influence on retail property values. The effect is stronger within a 5-mile radius of the casinos, suggesting that casinos have a complementary, rather than substitution, effect on other businesses. This provides some of the first micro-level empirical evidence to support the “drawing power” of casinos and the impact of consumer spending on surrounding businesses. The model developed and tested in this study can be applied to other casino jurisdictions to gain further evidence on the impact of commercial casinos.Keywords  Retail – Drawing power – Cumulative attraction – Casino

Walker acknowledges financial support for this project from the Carter Real Estate Center at t
he College of Charleston. Opinions in this paper do not necessarily represent the opinion of the CREC.

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