Are Voting and Buying Behavior Consistent? Evidence from the South Carolina Education Lottery
This article uses voting and sales data from the South Carolina Education Lottery to test whether the vote for a new lottery is driven by latent demand for lottery products or whether it reflects free-riding behavior or other public finance considerations. Including the predicted component of the lottery vote adds no explanatory power to a lottery sales regression. Given the dissimilarity of coefficients between vote and sales regressions, we conclude that there are significant differences in individuals' voting and buying behaviors. We find that the lottery vote is significantly higher in counties with underperforming schools and in counties along the state's borders, where cross-border shopping is an issue. We conclude that much of the variation in the vote is driven by these public finance issues. Finally, we discover that creation of the South Carolina lottery drew substantial revenues from North Carolina shoppers and stemmed an outflow of revenue to Georgia.
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