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The Income Elasticity of Lottery: New Evidence from Micro Data

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Author Info

  • Levi Pérez

    (Department of Economics, University of Oviedo, Asturias, Spain, lperez@uniovi.es)

  • Brad R. Humphreys

    (Department of Economics, University of Alberta, Alberta, Canada)

Abstract

The authors analyze consumer expenditure on the National Lottery in Spain, a popular game with over 100 draws per year and annual turnover of about three billion euros. Based on Tobit estimates using data from two nationally representative surveys, National Lottery players tend to be middle-aged married males with relatively low education. In contrast to previous research, the authors find a strong relationship between lottery expenditure and income, with estimated income elasticities of more than one. A parameter decomposition indicates that the effect of income on expenditure works through existing lottery players, not by attracting new players.

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Bibliographic Info

Article provided by in its journal Public Finance Review.

Volume (Year): 39 (2011)
Issue (Month): 4 (July)
Pages: 551-570

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Handle: RePEc:sae:pubfin:v:39:y:2011:i:4:p:551-570

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Related research

Keywords: Tobit; gambling; income elasticity; lottery; consumer spending;

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Cited by:
  1. Frank Crowley & John Eakins & Declan Jordan, 2012. "Participation,Expenditure and Regressivity in the Irish Lottery:Evidence from Irish Household Budget Survey 2004/2005," The Economic and Social Review, Economic and Social Studies, vol. 43(2), pages 199–225.
  2. Tim Friehe & Mario Mechtel, 2013. "Gambling to Leapfrog in Status?," CESifo Working Paper Series 4174, CESifo Group Munich.
  3. Humphreys, Brad R. & Perez, Levi, 2012. "Who Bets on Sports? Characteristics of Sports Bettors and the Consequences of Expanding Sports Betting Opportunities/¿Quién apuesta? Características de los apostantes deportivos y consecuencias de ," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 579-598, Agosto.
  4. Humphreys, Brad R. & Perez, Levi, 2013. "Syndicated play in lottery games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 124-131.

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