Gambling Behavior and Subjective Well-Being.

Gambling can enhance utility for some people but may reduce it when it leads to financial hardship and relationship problems. We hypothesize that, in the case of moderate-risk and problem gambling, the negative effects outweigh any potential benefits, resulting in an overall negative relationship with subjective well-being. Using nationally representative longitudinal data from Australia, we find evidence consistent with this hypothesis. Moderate-risk and problem gambling is associated with lower levels of subjective well-being. This result holds across a range of sensitivity checks, including tests for omitted variable bias, heteroskedasticity-based identification, and propensity score matching. Our findings underscore the importance of strategies that help reduce problematic gambling behavior and limit its potential harms.