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Poverty and economic behavior: gambling on social security paydays

Author

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  • Momi Dahan

Abstract

The goal of this research is to explore whether actual lottery revenues are sensitive to economic scarcity, as measured by intra-monthly stock of financial resources. Paydays of social security benefits are employed in this study to generate the various degrees of intra-monthly scarcity in financial resources. Using two million observations on daily lottery revenues that cover more than 2,500 lottery outlets in Israel over two years (2015–2016), the empirical analysis suggests that gambling revenue spikes at social security paydays. The estimation results imply that on income support payday aggregate lottery revenues are higher by 5% after taking into account potential determinants of gambling such as day of week, holidays and outlet characteristics. However, the calculated aggregate reaction of lottery revenues on income support payday is quite small and equals 0.5% of the total monthly payments deposited into the bank accounts of income support recipients. In addition, the other social security and salary paydays induce a trivial impact, relative to total monthly payments deposited into the bank accounts of the respective recipients. The findings presented here provide a valuable contribution to gambling studies that examine the relationship between economic conditions and lottery.

Suggested Citation

  • Momi Dahan, 2021. "Poverty and economic behavior: gambling on social security paydays," International Gambling Studies, Taylor & Francis Journals, vol. 21(1), pages 38-58, January.
    • Handle: RePEc:taf:intgms:v:21:y:2021:i:1:p:38-58
    DOI: 10.1080/14459795.2020.1792962
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    Cited by:

    1. Momi Dahan & Itamar Yakir, 2022. "Revealed political favoritism: evidence from the allocation of state lottery grants in Israel," Public Choice, Springer, vol. 190(3), pages 387-406, March.
    2. Dahan, Momi & Sayag, Doron, 2024. "Scarcity and consumption priorities," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).

    More about this item

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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