This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Optimal Taxation of Gambling and Lotto

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Walther Herbert () (Department of Economics, Vienna University of Economics & B.A.)
Abstract

Bets are analyzed using an intertemporal, state dependent expected utility model with non-linear probability weighting. Gamblers face a tradeoff between long-run expected utility from wealth and the short-run and fading emotional utility from gambling. Different wager tax bets, including lotto, are compared in various settings (fair bet versus monopoly). Reaction patterns are analyzed with respect to tax rates, the price of tickets, jackpots and the ’scale’ of the gamble. It is shown that optimal tax rates are higher for larger lotto communities, jackpots induce overshooting ’bubbles’ and taxes on lotto and fix-prize gambles are regressive.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.wu-wien.ac.at/inst/vw1/gee/papers/geewp47.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number geewp47.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:wiw:wiwgee:geewp47

Note: PDF Document
Contact details of provider:
Postal: Augasse 2-6, 1090 Vienna, Austria
Web page: http://www.wu-wien.ac.at/inst/vw1/gee/

For technical questions regarding this item, or to correct its listing, contact: (Werner Hoelzl).

Related research
Keywords:

Find related papers by JEL classification:
D - Microeconomics
H - Public Economics

This paper has been announced in the following NEP Reports:

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.:
  1. Walker, Ian & Young, Juliet, 2001. "An Economist's Guide to Lottery Design," Economic Journal, Royal Economic Society, vol. 111(475), pages F700-722, November. [Downloadable!] (restricted)
  2. Cook, Philip J & Clotfelter, Charles T, 1993. "The Peculiar Scale Economies of Lotto," American Economic Review, American Economic Association, vol. 83(3), pages 634-43, June. [Downloadable!] (restricted)
    Other versions:
  3. Ian Walker, 1998. "The economic analysis of lotteries," Economic Policy, CEPR, CES, MSH, vol. 13(27), pages 357-402, October. [Downloadable!] (restricted)
  4. Lattimore, Pamela K. & Baker, Joanna R. & Witte, Ann D., 1992. "The influence of probability on risky choice: A parametric examination," Journal of Economic Behavior & Organization, Elsevier, vol. 17(3), pages 377-400, May. [Downloadable!] (restricted)
  5. Pamela K. Lattimore & Joanna R. Baker & A. Dryden Witte, 1992. "The Influence Of Probability on Risky Choice: A parametric Examination," NBER Technical Working Papers 0081, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Scott, Frank & Garen, John, 1994. "Probability of purchase, amount of purchase, and the demographic incidence of the lottery tax," Journal of Public Economics, Elsevier, vol. 54(1), pages 121-143, May. [Downloadable!] (restricted)
  7. Walther, Herbert, 2003. "Normal-randomness expected utility, time preference and emotional distortions," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 253-266, October. [Downloadable!] (restricted)
  8. Quiggin, John, 1991. "On the Optimal Design of Lotteries," Economica, London School of Economics and Political Science, vol. 58(229), pages 1-16, February. [Downloadable!] (restricted)
  9. Matheson, Victor A. & Grote, Kent R., 2004. "Lotto fever: do lottery players act rationally around large jackpots?," Economics Letters, Elsevier, vol. 83(2), pages 233-237, May. [Downloadable!] (restricted)
  10. William R. Eadington, 1999. "The Economics of Casino Gambling," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 173-192, Summer. [Downloadable!] (restricted)
  11. Beenstock, Michael & Haitovsky, Yoel, 2001. "Lottomania and other anomalies in the market for lotto," Journal of Economic Psychology, Elsevier, vol. 22(6), pages 721-744, December. [Downloadable!] (restricted)
  12. Clotfelter, Charles T & Cook, Philip J, 1990. "On the Economics of State Lotteries," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 105-19, Fall. [Downloadable!] (restricted)
  13. Shapira, Zur & Venezia, Itzhak, 1992. "Size and frequency of prizes as determinants of the demand for lotteries," Organizational Behavior and Human Decision Processes, Elsevier, vol. 52(2), pages 307-318, July. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? Citation analysis on IDEAS includes online papers that are freely accessible and whose text could be automatically analyzed, currently about 210000 papers.

This page was last updated on 2009-11-15.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.