individuals and families, as well as to communities, as discussed in this chapter. Such costs include traffic congestion, demand for more public infrastructure or services (roads, schools, police, fire protection, etc.), environmental effects, displacement of local residents, increased crime, and pathological or problem gambling. To the extent that pathological gambling contributes to bankruptcy and bad debts, these increase the cost of credit throughout the economy. We use the term "costs" to include the negative consequences of pathological gambling for gamblers, their immediate social environments, and the larger community.
As we said, the fundamental policy question is whether the benefits or the costs are larger and by how much. This can in theory be determined with benefit-cost analysis. Complicating such analysis, however, is the fact that social and economic effects can be difficult to measure. This is especially true for intangible social costs, such as emotional pain and other losses experienced by family members of a pathological gambler, and the productivity losses of employees who are pathological or problem gamblers. Beneficial effects can also be difficult to measure and, as with costs, can vary in type and magnitude across time and gambling venues, as well as type of gambling (e.g., lotteries, land-based casinos, riverboat casinos, bingo, pari-mutuel gambling, offtrack betting, sports betting).
Ideally, the fundamental benefit-versus-cost question should be asked for each form of gambling and should take into consideration such economic factors as real costs versus economic transfers, tangible and intangible effects, direct and indirect effects, present and future values (i.e., discounting), and gains and losses experienced by different groups in various settings (Gramlich, 1990:229). Moreover, the costs and benefits of pathological gambling need to be considered in the context of the overall effects that gambling has on society.1 Unfortunately, the state of research into the benefits and costs of gambling generally, and into the costs of pathological gambling specifically, is not sufficiently advanced to allow definitive conclusions to be drawn. Few reliable