Economic cost–benefit analysis of the addictive digital game industry

Dong J. Cho, Hyung T. Kim, Jaywon Lee, Sang H. Park

Research output: Contribution to journalArticle

2 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)638-642
Number of pages5
JournalApplied Economics Letters
Volume25
Issue number9
DOIs
Publication statusPublished - May 21 2018

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Keywords

  • Digital game industry
  • economic cost–benefit analysis
  • game addiction
  • policy recommendation

ASJC Scopus subject areas

  • Economics and Econometrics

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