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Consumer behaviour in lottery: the double hurdle approach and zeros in gambling survey data

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  • Brad R. Humphreys
  • Yang Seung Lee
  • Brian P. Soebbing

Abstract

Governments world-wide increasingly rely on gambling revenues, increasing the importance of understanding who gambles and why. Previous literature used Tobit and Heckman models to statistically analyse participation in gambling. These models make strong assumptions about the nature of gambling participation. We examine the double hurdle model as an alternative to other statistical approaches to modelling gambling participation and spending for lotteries in the province of Alberta, Canada. Our results for lotteries, based on data from a 2002 survey of gambling prevalence in Alberta, clearly prefer the double hurdle model, which yields different results than the commonly used Tobit model. This has important implications for governments who rely on revenues from lottery to fund many different programs in their jurisdictions.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:intgms:v:10:y:2010:i:2:p:165-176
    DOI: 10.1080/14459795.2010.502180
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    Cited by:

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    3. John Eakins, 2016. "Household gambling expenditures and the Irish recession," International Gambling Studies, Taylor & Francis Journals, vol. 16(2), pages 211-230, August.
    4. 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).
    5. Humphreys, Brad & Perez, Levi, 2011. "Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries," Working Papers 2011-17, University of Alberta, Department of Economics.
    6. Thibaut, Erik & Eakins, John & Vos, Steven & Scheerder, Jeroen, 2017. "Time and money expenditure in sports participation: The role of income in consuming the most practiced sports activities in Flanders," Sport Management Review, Elsevier, vol. 20(5), pages 455-467.
    7. Bernd Frick & Pamela Wicker, 2018. "The Monetary Value of Having a First Division Bundesliga Team to Local Residents," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 70(1), pages 63-103, February.
    8. 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.
    9. Eakins, John, 2016. "An application of the double hurdle model to petrol and diesel household expenditures in Ireland," Transport Policy, Elsevier, vol. 47(C), pages 84-93.
    10. Pamela Wicker & John C Whitehead & Daniel S Mason & Bruce K Johnson, 2017. "Public support for hosting the Olympic Summer Games in Germany: The CVM approach," Urban Studies, Urban Studies Journal Limited, vol. 54(15), pages 3597-3614, November.
    11. Aysit Tansel & Halil Ibrahim Keskin, 2017. "Education Effects on Days Hospitalized and Days out of Work by Gender: Evidence from Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 1721, Koc University-TUSIAD Economic Research Forum.
    12. Mandikiana, Brian W., 2021. "Choice and expenditure: A double hurdle model of private tutoring in Qatar," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 1-15.
    13. Thibaut, Erik & Vos, Steven & Scheerder, Jeroen, 2014. "Hurdles for sports consumption? The determining factors of household sports expenditures," Sport Management Review, Elsevier, vol. 17(4), pages 444-454.
    14. 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.

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