Spatial probit and the geographic patterns of state lotteries
AbstractWe implement a spatial probit model to differentiate states with a lottery from those without a lottery. Our analysis extends the basic spatial probit model by allowing spatial dependence to vary across geographic regions. We also separate the spatial effects of neighbors versus non-neighbors. The methodology provides consistent and efficient coefficient estimation in light of the simultaneity in spatial dependence. We find evidence of spatial dependence and spatial heterogeneity in lottery usage, and we find that spatial patterns differ significantly by geographic region. The importance of spatial dependence in state lottery usage suggests the need to consider spatial effects in empirical models examining the use of any policy tool by subnational governmental units.
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2003-042.
Date of creation: 2004
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