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An International Comparison and Analysis of Lotteries and the Distribution of Lottery Expenditures

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  • Thomas Garrett

Abstract

Lotteries are found in nearly half of the world's countries, with annual worldwide lottery ticket sales topping $115 billion. Despite the global presence of lottery games, there has been little research conducted on any international aspect of lotteries. This paper presents the first-ever examination and comparison of lottery games from around the world. Differences in both absolute and relative lottery expenditures are presented. Estimates for the income elasticity of demand for lottery tickets provide evidence on the distributional burden of lottery expenditures. These estimates consider each country by continental location and country income level. Further analysis reveals that lower income countries could adopt Lotto games in order to increase revenues. Recognizing that the distributional impact of lottery games is one of the greatest concerns surrounding lotteries, it is shown that the introduction of Lotto games does not significantly affect the distributional burden of lottery ticket expenditures. Given the international scope of lotteries and the availability of international lottery game data, the paper concludes by discussing future research on international lottery games.

Suggested Citation

  • Thomas Garrett, 2001. "An International Comparison and Analysis of Lotteries and the Distribution of Lottery Expenditures," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(2), pages 213-227.
  • Handle: RePEc:taf:irapec:v:15:y:2001:i:2:p:213-227
    DOI: 10.1080/02692170151137096
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    References listed on IDEAS

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    1. Charles T. Clotfelter & Philip J. Cook, 1989. "Selling Hope: State Lotteries in America," NBER Books, National Bureau of Economic Research, Inc, number clot89-1, January.
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    3. Scoggins, John F., 1995. "The Lotto and Expected Net Revenue," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(1), pages 61-70, March.
    4. Mikesell, John L., 1994. "State Lottery Sales and Economic Activity," National Tax Journal, National Tax Association, vol. 47(1), pages 165-71, March.
    5. 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.
    6. Garrett, Thomas A. & Sobel, Russell S., 1999. "Gamblers favor skewness, not risk: Further evidence from United States' lottery games," Economics Letters, Elsevier, vol. 63(1), pages 85-90, April.
    7. Farrell, Lisa & Walker, Ian, 1999. "The welfare effects of lotto: evidence from the UK," Journal of Public Economics, Elsevier, vol. 72(1), pages 99-120, April.
    8. Scoggins, John F., 1995. "The Lotto and Expected Net Revenue," National Tax Journal, National Tax Association, vol. 48(1), pages 61-70, March.
    9. Charles T. Clotfelter & Philip J. Cook, 1987. "Implicit Taxation in Lottery Finance," NBER Working Papers 2246, National Bureau of Economic Research, Inc.
    10. Quiggin, John, 1991. "On the Optimal Design of Lotteries," Economica, London School of Economics and Political Science, vol. 58(229), pages 1-16, February.
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    Cited by:

    1. Andrew C. Worthington & Kerry Brown & Mary Crawford & David Pickernell, 2003. "Socioeconomic And Demographic Determinants Of Household Gambling In Australia," School of Economics and Finance Discussion Papers and Working Papers Series 156, School of Economics and Finance, Queensland University of Technology.
    2. 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.
    3. Thomas Gall, 2008. "Lotteries, inequality, and market imperfection: Galor and Zeira go gambling," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(2), pages 359-382, February.
    4. Andrew Tan & Steven Yen & Rodolfo Nayga, 2009. "The Demand for Vices in Malaysia: An Ethnic Comparison Using Household Expenditure Data," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(4), pages 367-382, December.
    5. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: A Survey of the Literature," Working Papers 1109, College of the Holy Cross, Department of Economics.
    6. Kocher, Martin G. & Krawczyk, Michal & van Winden, Frans, 2014. "‘Let me dream on!’ Anticipatory emotions and preference for timing in lotteries," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 29-40.
    7. Victor Matheson & Kent Grote, 2009. "Spreading the Fortune: The Distribution of Lottery Prizes across Countries," Working Papers 0904, College of the Holy Cross, Department of Economics.
    8. Maria João Kaizeler & Horácio C. Faustino, 2008. "Demand for Lottery Products: A Cross-Country Analysis," Working Papers Department of Economics 2008/33, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.

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