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The Impact of Earmarked Lottery Revenue on K–12 Educational Expenditures

Author

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  • William N. Evans

    (Department of Economics, University of Maryland)

  • Ping Zhang

    (Kowloon, Hong Kong)

Abstract

Of thirty-eight states with lotteries, sixteen earmark lottery profits for primary and secondary education. In this article, we use a panel data set of states with lotteries to examine the impact of earmarking lottery revenues on state educational spending. We can reject the hypothesis that spending increases dollar for dollar with earmarked profits, but there is a high likelihood that earmarking increases school spending more than non-earmarking. We find that 50–70 cents out of an earmarked dollar finds its way to local school districts. In contrast, each dollar of lottery profits increases state revenues to schools by about 30 cents in states that deposit profits into the general fund. Of the lottery dollars that reach local school districts, we find that at least 80 percent of it is spent on schools. © 2007 American Education Finance Association

Suggested Citation

  • William N. Evans & Ping Zhang, 2007. "The Impact of Earmarked Lottery Revenue on K–12 Educational Expenditures," Education Finance and Policy, MIT Press, vol. 2(1), pages 40-73, January.
    • Handle: RePEc:tpr:edfpol:v:2:y:2007:i:1:p:40-73
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/edfp.2007.2.1.40
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    Cited by:

    1. Jeremy Jackson, 2013. "Tax earmarking, party politics and gubernatorial veto: theory and evidence from US states," Public Choice, Springer, vol. 155(1), pages 1-18, April.
    2. Phuong Nguyen-Hoang, 2015. "Volatile earmarked revenues and state highway expenditures in the United States," Transportation, Springer, vol. 42(2), pages 237-256, March.

    More about this item

    Keywords

    lottery revenue; educational spending;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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