Advanced Search
MyIDEAS: Login to save this paper or follow this series

Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries

Contents:

Author Info

  • Humphreys, Brad

    ()
    (University of Alberta, Department of Economics)

  • Perez, Levi

    ()
    (University of Oviedo)

Abstract

Government sponsored lotteries operate around the world. Their popularity has grown substantially over time. Legal lottery gambling generates significant public revenue, much of it from the lower part of the income distribution. Lottery is almost always an unfair bet, so explaining the purchase of lottery tickets by risk-averse consumers has long challenged economic theory. Lotteries can be analyzed from the perspective of public finance, as source of public revenue, or consumer theory, as a consumer commodity. We survey the state of economic research on lotteries from both perspectives, focusing on the key empirical findings.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.economics.ualberta.ca/~/media/economics/FacultyAndStaff/WPs/WP2011-17-Humphreys.pdf
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2011-17.

as in new window
Length: 37 pages
Date of creation: 01 Oct 2011
Date of revision:
Handle: RePEc:ris:albaec:2011_017

Contact details of provider:
Postal: 8-14 HM Tory, Edmonton, Alberta, T6G 2H4
Phone: (780) 492-3406
Fax: (780) 492-3300
Web page: http://www.economics.ualberta.ca/
More information through EDIRC

Related research

Keywords: lottery; implicit tax; effective price; jackpot; conscious selection;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Victor Matheson, 2001. "When Are State Lotteries a Good Bet (Revisited)?," Eastern Economic Journal, Eastern Economic Association, Eastern Economic Association, vol. 27(1), pages 55-70, Winter.
  2. Kent Grote & Victor Matheson, 2007. "Examining the 'Halo Effect' in lotto games," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(4), pages 307-310.
  3. David Forrest & O. David Gulley & Robert Simmons, 2004. "Substitution between games in the UK national lottery," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(7), pages 645-651.
  4. Charles T. Clotfelter & Philip J. Cook, 1987. "Implicit Taxation in Lottery Finance," NBER Working Papers 2246, National Bureau of Economic Research, Inc.
  5. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  6. Kearney, Melissa Schettini, 2005. "State lotteries and consumer behavior," Journal of Public Economics, Elsevier, Elsevier, vol. 89(11-12), pages 2269-2299, December.
  7. Scott, Frank & Garen, John, 1994. "Probability of purchase, amount of purchase, and the demographic incidence of the lottery tax," Journal of Public Economics, Elsevier, Elsevier, vol. 54(1), pages 121-143, May.
  8. Thomas Garrett, 2001. "An International Comparison and Analysis of Lotteries and the Distribution of Lottery Expenditures," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 15(2), pages 213-227.
  9. Lisa Farrell & David Forrest, 2008. "Measuring displacement effects across gaming products: a study of Australian gambling markets," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 40(1), pages 53-62.
  10. Conlisk, John, 1993. " The Utility of Gambling," Journal of Risk and Uncertainty, Springer, Springer, vol. 6(3), pages 255-75, June.
  11. Brad R. Humphreys & Victor Matheson, 2010. "Booms, Busts, and Gambling: Can Gaming Revenues Reduce Budget Volatility?," Working Papers, College of the Holy Cross, Department of Economics 1003, College of the Holy Cross, Department of Economics.
  12. Farrell, Lisa & Morgenroth, Edgar & Walker, Ian, 1999. " A Time Series Analysis of U.K. Lottery Sales: Long and Short Run Price Elasticities," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 61(4), pages 513-26, November.
  13. Donald I. Price & E. Shawn Novak, 2000. "The Income Redistribution Effects of Texas State Lottery Games," Public Finance Review, , , vol. 28(1), pages 82-92, January.
  14. Humphreys, Brad & Lee, Yang Seung & Soebbing, Brian, 2009. "Consumer Behaviour in Lotto Markets: The Double Hurdle Approach and Zeros in Gambling Survey Data," Working Papers 2009-27, University of Alberta, Department of Economics.
  15. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 56, pages 279.
  16. Matheson, Victor A. & Grote, Kent R., 2004. "Lotto fever: do lottery players act rationally around large jackpots?," Economics Letters, Elsevier, Elsevier, vol. 83(2), pages 233-237, May.
  17. Farrell, Lisa, et al, 2000. "The Demand for Lotto: The Role of Conscious Selection," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 18(2), pages 228-41, April.
  18. Jonathan Guryan & Melissa S. Kearney, 2008. "Gambling at Lucky Stores: Empirical Evidence from State Lottery Sales," American Economic Review, American Economic Association, American Economic Association, vol. 98(1), pages 458-73, March.
  19. Donald Siegel & Gary Anders, 2001. "The Impact of Indian Casinos on State Lotteries: A Case Study of Arizona," Public Finance Review, , , vol. 29(2), pages 139-147, March.
  20. Patrick Feehan & David Forrest, 2007. "Distribution of UK National Lottery grants across local authority areas," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(5), pages 361-365.
  21. Victor Matheson & Kent Grote, 2004. "Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?," Working Papers, College of the Holy Cross, Department of Economics 0406, College of the Holy Cross, Department of Economics.
  22. Alm, James & McKee, Michael J. & Skidmore, Mark, 1993. "Fiscal Pressure, Tax Competition, and the Introduction of State Lotteries," National Tax Journal, National Tax Association, vol. 46(4), pages 463-76, December.
  23. Patrick Roger & Marie-Helene Broihanne, 2007. "Efficiency of Betting Markets and Rationality of Players: Evidence from the French 6/49 Lotto," Journal of Applied Statistics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 34(6), pages 645-662.
  24. George Geronikolaou & George A. Papachristou, 2007. "On the Demand for Lotteries in Greece," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 6(3), pages 255-259, December.
  25. Borg, Mary O. & Mason, Paul M., 1988. "The Budgetary Incidence of a Lottery to Support Education," National Tax Journal, National Tax Association, vol. 41(1), pages 75-85, March.
  26. O. Homer Erekson & Glenn Platt & Christopher Whistler & Andrea Ziegert, 1999. "Factors influencing the adoption of state lotteries," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 31(7), pages 875-884.
  27. Papachristou, George & Karamanis, Dimitri, 1998. "Investigating efficiency in betting markets: Evidence from the Greek 6/49 Lotto," Journal of Banking & Finance, Elsevier, Elsevier, vol. 22(12), pages 1597-1615, December.
  28. Andrew C. Worthington, 2001. "Implicit Finance in Gambling Expenditures: Australian Evidence on Socioeconomic and Demographic Tax Incidence," Public Finance Review, , , vol. 29(4), pages 326-342, July.
  29. Mark M. Glickman & Gary D. Painter, 2004. "Do Tax and Expenditure Limits Lead to State Lotteries? Evidence from the United States: 1970-1992," Public Finance Review, , , vol. 32(1), pages 36-64, January.
  30. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(4), pages 675-700, August.
  31. Stranahan, Harriet & Borg, Mary O., 1998. "Horizontal Equity Implications of the Lottery Tax," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 71-82, March.
  32. Garrett, Thomas A. & Marsh, Thomas L., 2002. "The revenue impacts of cross-border lottery shopping in the presence of spatial autocorrelation," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 32(4), pages 501-519, July.
  33. Goodman, Joseph K. & Irwin, Julie R., 2006. "Special random numbers: Beyond the illusion of control," Organizational Behavior and Human Decision Processes, Elsevier, Elsevier, vol. 99(2), pages 161-174, March.
  34. Ursula Hauser-Rethaller & Ulrich König, 2002. "Parimutuel Lotteries: Gamblers' Behavior and the Demand for Tickets," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 3(2), pages 223-245, 05.
  35. Cletus C. Coughlin & Thomas A. Garrett & Rubén Hernández-Murillo, 2006. "The geography, economics, and politics of lottery adoption," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue May, pages 165-180.
  36. Chin-Tsai Lin & Chien-Hua Lai, 2006. "Substitute effects between Lotto and Big Lotto in Taiwan," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 13(10), pages 655-658.
  37. Marc Le Menestrel, 2001. "A process approach to the utility for gambling," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 570, Department of Economics and Business, Universitat Pompeu Fabra.
  38. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association, vol. 42(1), pages 89-93, March.
  39. Scott, Frank A, Jr & Gulley, O David, 1995. "Testing for Efficiency in Lotto Markets," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 33(2), pages 175-88, April.
  40. Garrett, Thomas A, 1999. "A Test of Shirking under Legislative and Citizen Vote: The Case of State Lottery Adoption," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 42(1), pages 189-208, April.
  41. Garrett, Thomas A. & Sobel, Russell S., 1999. "Gamblers favor skewness, not risk: Further evidence from United States' lottery games," Economics Letters, Elsevier, Elsevier, vol. 63(1), pages 85-90, April.
  42. Oster, Emily, 2004. "Are All Lotteries Regressive? Evidence from the Powerball," National Tax Journal, National Tax Association, vol. 57(2), pages 179-87, June.
  43. David Forrest & Ian McHale, 2007. "The Relationship Between a National and a Multistate Lotto Game," Journal of Gambling Business and Economics, University of Buckingham Press, University of Buckingham Press, vol. 1(3), pages 207-216, November.
  44. Vaughan Williams,Leighton (ed.), 2005. "Information Efficiency in Financial and Betting Markets," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521816038.
  45. Ian Walker, 1998. "The economic analysis of lotteries," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 13(27), pages 357-402, October.
  46. Beenstock, Michael & Haitovsky, Yoel, 2001. "Lottomania and other anomalies in the market for lotto," Journal of Economic Psychology, Elsevier, Elsevier, vol. 22(6), pages 721-744, December.
  47. Farrell, Lisa & Walker, Ian, 1999. "The welfare effects of lotto: evidence from the UK," Journal of Public Economics, Elsevier, Elsevier, vol. 72(1), pages 99-120, April.
  48. Jen-Hung Wang & Larry Tzeng & Junji Tien, 2006. "Willingness to pay and the demand for lotto," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(10), pages 1207-1216.
  49. David Forrest & O. David Gulley & Robert Simmons, 2000. "Testing for rational expectations in the UK National Lottery," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 32(3), pages 315-326.
  50. Walker, Ian & Young, Juliet, 2001. "An Economist's Guide to Lottery Design," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(475), pages F700-722, November.
  51. Tosun, Mehmet Serkan & Skidmore, Mark, 2004. "Interstate Competition and State Lottery Revenues," National Tax Journal, National Tax Association, vol. 57(2), pages 163-78, June.
  52. Stephen Fink & Alan Marco & Jonathan Rork, 2004. "Lotto nothing? The budgetary impact of state lotteries," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(21), pages 2357-2367.
  53. Mark Edward Stover, 1990. "Contiguous state lotteries: Substitutes or complements?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 9(4), pages 565-568.
  54. Cook, Philip J & Clotfelter, Charles T, 1993. "The Peculiar Scale Economies of Lotto," American Economic Review, American Economic Association, American Economic Association, vol. 83(3), pages 634-43, June.
  55. Quiggin, John, 1991. "On the Optimal Design of Lotteries," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 58(229), pages 1-16, February.
  56. Scoggins, John F., 1995. "The Lotto and Expected Net Revenue," National Tax Journal, National Tax Association, vol. 48(1), pages 61-70, March.
  57. Franklin Mixon & Steven Caudill & Jon Ford & Ter Peng, 1997. "The rise (or fall) of lottery adoption within the logic of collective action: Some empirical evidence," Journal of Economics and Finance, Springer, Springer, vol. 21(1), pages 43-49, March.
  58. George Papachristou, 2004. "The British gambler's fallacy," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(18), pages 2073-2077.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ris:albaec:2011_017. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brenda Carrier).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.