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The Income Redistribution Effects of Texas State Lottery Games

Author

Listed:
  • Donald I. Price

    (Lamar University)

  • E. Shawn Novak

    (Boise State University)

Abstract

This study examines the regressivity of three lottery games in the state of Texas using data from 195 of the state’s 254 counties. The income distribution effects are examined using Suits indices and multiple-regression analyses. The findings, by each technique, show that all three lottery games are regressive and that the most regressive of the games are the instant games, the games with the smallest but most immediate payoffs. The findings of the multiple-regression analyses indicate that the instant games are the only ones that show a significantly positive relationship between the size of the minority population and purchases. Furthermore, the results show that the instant games are the only games in which a significantly negative relationship was found between the percentage of college graduates and purchases. Finally, all games were found to be complementary to all other goods.

Suggested Citation

  • 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.
  • Handle: RePEc:sae:pubfin:v:28:y:2000:i:1:p:82-92
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    Cited by:

    1. Lunn, Pete, 2007. "Fair Play? Sport and Social Disadvantage in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BMI190.
    2. Ghent, Linda S. & Grant, Alan P., 2010. "The Demand for Lottery Products and Their Distributional Consequences," National Tax Journal, National Tax Association, vol. 63(2), pages 253-268, June.
    3. Humphreys, Brad & Perez, Levi, 2011. "Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries," Working Papers 2011-17, University of Alberta, Department of Economics.
    4. Andrew Weinbach & Rodney Paul, 2008. "Running the Numbers on Lotteries and the Poor: An Empirical Analysis of Transfer Payment Distribution and Subsequent Lottery Sales," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(3), pages 333-344, September.
    5. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    6. Brad Humphreys & Levi Perez, 2012. "Network externalities in consumer spending on lottery games: evidence from Spain," Empirical Economics, Springer, vol. 42(3), pages 929-945, June.
    7. repec:ebl:ecbull:v:4:y:2007:i:42:p:1-11 is not listed on IDEAS
    8. Michael Coon & Gwyneth Whieldon, 2016. "Elasticity of Demand and Optimal Prize Distribution for Instant Lottery Games," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(4), pages 457-469, December.
    9. Cho-Min Lin & Kung-Cheng Lin, 2007. "The demand for lottery expenditure in Taiwan: a quantile regression approach," Economics Bulletin, AccessEcon, vol. 4(42), pages 1-11.

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