Inter-temporal differences in the income elasticity of demand for lottery tickets
AbstractWe estimate annual income elasticities of demand for lottery tickets using roughly twenty years of county-level data for three states. We find that the income elasticity of demand (and thus the tax burden) for lottery tickets has changed over time. We argue that these changes are due to changes in a state's lottery game portfolio and the growth in consumer income. Trends in the income elasticity of demand for instant and online lottery games appear to be different. Our results question the long-term growth potential of lottery revenue and have policy implications for state governments and those concerned about regressivity.
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2007-042.
Date of creation: 2007
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Other versions of this item:
- Garrett, Thomas A. & Coughlin, Cletus C., 2009. "Inter–temporal Differences in the Income Elasticity of Demand for Lottery Tickets," National Tax Journal, National Tax Association, vol. 62(1), pages 77-99, March.
- NEP-ALL-2007-11-24 (All new papers)
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