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Are “Education Lotteries” Less Regressive? Evidence from Texas

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  • Celeste K. Carruthers
  • Kara D. Smith

Abstract

With little exception, research has shown that state‐sponsored lotteries are regressive in the aggregate, in that lottery sales do not increase proportionately with area income. We test whether the purpose of lottery revenues mitigates this spatial regressivity. In August of 1997, the statutory earmark for Texas Lottery proceeds moved from the General Fund to the Foundation School Fund, which supports K‐12 education. Beginning in 2000, the lottery was increasingly marketed as a funding stream for public schools. Drawing on a content analysis of lottery commission press releases from 1993 to 2006, we find that Instant game sales were modestly responsive to education messaging, in that sales became noticeably less regressive in the wake of more intense reminders of the education component of the state lottery. It is likely that unobserved heterogeneity in local sales factors played a much bigger role than education marketing.

Suggested Citation

  • Celeste K. Carruthers & Kara D. Smith, 2020. "Are “Education Lotteries” Less Regressive? Evidence from Texas," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 1019-1040, January.
    • Handle: RePEc:wly:soecon:v:86:y:2020:i:3:p:1019-1040
    DOI: 10.1002/soej.12413
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