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The Impact of Lotteries on State Education Expenditures: Does Earmarking Matter?

  • Pantuosco, Louis

    (Winthrop U)

  • Seyfried, William

    (Rollins College)

  • Stonebraker, Robert

    (Winthrop U)

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    In this paper, we estimate the impact of earmarking lottery revenue to education as opposed to filtering lottery revenue through a state's general fund. A unique facet of this investigation is the comparison of states with lottery revenue earmarked for spending on K-12 education and states with lotteries for general funds. This approach enables us to investigate the effect of state lottery revenues on education and other budgetary components in a more controlled environment by mitigating lottery preference differences across states. Consistent with previous research, we find that earmarking lottery proceeds for K-12 education has little or no impact on actual state K-12 funding. We also find that lottery revenue does seem to increase K-12 funding in states that deposit the revenues into their general funds.

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    Article provided by Southern Regional Science Association in its journal Review of Regional Studies.

    Volume (Year): 37 (2007)
    Issue (Month): 2 ()
    Pages: 169-85

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    Handle: RePEc:rre:publsh:v:37:y:2007:i:2:p:169-85
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