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Income elasticity of demand for horse wagering — Large-scale evidence from online betting accounts

Author

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  • Forrest, David
  • Kainulainen, Tuomo
  • Saastamoinen, Jani
  • Suhonen, Niko

Abstract

The paper investigates income elasticity of demand for online horserace betting, using individual account data and administrative data from Finland. Overall income elasticity is positive but low. However, elasticity varies substantially across the income distribution from near-zero at the bottom to unity among higher income groups. Increased betting expenditure as income increases is associated with greater intensity rather than with greater frequency of betting.

Suggested Citation

  • Forrest, David & Kainulainen, Tuomo & Saastamoinen, Jani & Suhonen, Niko, 2022. "Income elasticity of demand for horse wagering — Large-scale evidence from online betting accounts," Economics Letters, Elsevier, vol. 213(C).
    • Handle: RePEc:eee:ecolet:v:213:y:2022:i:c:s0165176522000477
    DOI: 10.1016/j.econlet.2022.110356
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    References listed on IDEAS

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    1. Kathryn L. Combs & John A. Spry, 2019. "The Effects Of Lotto Game Changes And Large Jackpots On Income Elasticities And Sales," Contemporary Economic Policy, Western Economic Association International, vol. 37(2), pages 261-273, April.
    2. James Rude & Yves Surry & Robert Kron, 2014. "A generalized double-hurdle model of Swedish gambling expenditures," Applied Economics, Taylor & Francis Journals, vol. 46(34), pages 4151-4163, December.
    3. Thomas A. Garrett, 2016. "The (Aggregate) Demand For State-Lottery Tickets: What Have We Really Learned?," Contemporary Economic Policy, Western Economic Association International, vol. 34(3), pages 475-482, July.
    4. David Forrest & O. David Gulley, 2009. "Participation and level of play in the UK National Lottery and correlation with spending on other modes of gambling," International Gambling Studies, Taylor & Francis Journals, vol. 9(2), pages 165-178, August.
    5. Brad R. Humphreys & Yang Seung Lee & Brian P. Soebbing, 2010. "Consumer behaviour in lottery: the double hurdle approach and zeros in gambling survey data," International Gambling Studies, Taylor & Francis Journals, vol. 10(2), pages 165-176, August.
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    More about this item

    Keywords

    Betting; Horseracing; Income elasticity; Spline regression;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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    Access and download statistics

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