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Are Consumers More Willing to Invest in Luck During Recessions?

Author

Listed:
  • Sara Capacci

    (University of Bologna)

  • Emanuela Randon

    (University of Bologna)

  • Antonello Eugenio Scorcu

    (University of Bologna)

Abstract

We use monthly data on gross expenditure on luck and skill games in Italy to investigate whether people react to recessions investing in activities based on fortune or ability. Luck game expenditure is volatile and positively correlated with unemployment in economic downturns. Naive consumers tend to consider luck games as a potential source of additional income during recessions. Skill game expenditure is persistent over time and uncorrelated with the unemployment rate, suggesting a more balanced attitude of skill consumers. This study provides evidence on the prevailing behavior and reaction of expert or naïve consumers when facing economic downturns.

Suggested Citation

  • Sara Capacci & Emanuela Randon & Antonello Eugenio Scorcu, 2017. "Are Consumers More Willing to Invest in Luck During Recessions?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(1), pages 25-38, March.
    • Handle: RePEc:spr:italej:v:3:y:2017:i:1:d:10.1007_s40797-016-0043-x
    DOI: 10.1007/s40797-016-0043-x
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    2. Can Xu & Andreas Steiner & Jakob de Haan, 2023. "Does Economic Policy Uncertainty Encourage Gambling? Evidence from the Chinese Welfare Lottery Market," CESifo Working Paper Series 10241, CESifo.

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    More about this item

    Keywords

    Gambling; Great Recession; Italy; Unemployment;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • G01 - Financial Economics - - General - - - Financial Crises

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