Economic cost–benefit analysis of the addictive digital game industry. Issue 9 (21st May 2018)

• Record Type: Journal Article
• Authors: Cho, Dong J.; Kim, Hyung T.; Lee, Jaywon; Park, Sang H.
• Is Part Of: Applied economics letters. Volume 25:Issue 9(2018)
• Page Start: 638
• Page End: 642
• Publication Date: 2018-05-21
• Subjects: Digital game industry -- game addiction -- economic cost–benefit analysis -- policy recommendation; D61 -- L78 -- M14 -- M41; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2017.1355528
• Languages: English
• ISSNs: 1350-4851

Abstract

ABSTRACT: This study attempts to estimate the economic costs and benefits of the addictive digital game industry. Addiction to digital games induces economic costs such as increase in crime, facilities investments for curbing addiction, increase in counselling costs and other welfare losses. As a case study, we investigate the digital game industry in South Korea which is known to have one of the highest rates of game addiction. According to our calculations, the annual cost of game addiction is estimated to be approximately $3.5B while the annual benefit is approximately $24.3B ($3.7B for addicted user market). The proportion of the total costs to total benefits from the game industry is an alarming 14% (95% for addicted user market). We offer some policy recommendations.