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State lotteries and consumer behavior [An article from: Journal of Public Economics]
Book Details
Author(s)M.S. Kearney
PublisherElsevier
ISBN / ASINB000RR5LFK
ISBN-13978B000RR5LF7
AvailabilityAvailable for download now
Sales Rank12,368,843
MarketplaceUnited States 🇺🇸
Description
This digital document is a journal article from Journal of Public Economics, published by Elsevier in . The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
This paper investigates two central issues regarding state lotteries. First, analyses of multiple sources of micro-level data demonstrate that household lottery spending is financed primarily by a reduction in non-gambling expenditures, not by a reduction in expenditures on other forms of gambling. The introduction of a state lottery is associated with an average decline of $46 per month, or 2.4 percent, in household non-gambling expenditures. Low-income households reduce non-gambling household expenditures by 2.5 percent on average, 3.1 percent when the state lottery includes instant games. These households experience statistically significant declines in expenditures on food and on rent, mortgage, and other bills. Second, consumer demand for lottery products responds positively to the expected value of the gamble, controlling for other statistical moments and product characteristics, including the nominal top prize amount. This finding is consistent with informed choice among consumers of lottery products, although other forms of irrational or misinformed choice cannot be ruled out.
Description:
This paper investigates two central issues regarding state lotteries. First, analyses of multiple sources of micro-level data demonstrate that household lottery spending is financed primarily by a reduction in non-gambling expenditures, not by a reduction in expenditures on other forms of gambling. The introduction of a state lottery is associated with an average decline of $46 per month, or 2.4 percent, in household non-gambling expenditures. Low-income households reduce non-gambling household expenditures by 2.5 percent on average, 3.1 percent when the state lottery includes instant games. These households experience statistically significant declines in expenditures on food and on rent, mortgage, and other bills. Second, consumer demand for lottery products responds positively to the expected value of the gamble, controlling for other statistical moments and product characteristics, including the nominal top prize amount. This finding is consistent with informed choice among consumers of lottery products, although other forms of irrational or misinformed choice cannot be ruled out.
