Gamblers as personal finance activists
Gambling behavior can serve as an informative indicator of important household heterogeneity that is difficult to observe directly in data. We present, to the best of our knowledge, the first comprehensive study of the consumption and personal finance of gamblers using a nationwide representative household survey. We find that consumers are more likely to gamble when income is higher than its normal level predicted by observable characteristics, and that nongambling expenditures tend to increase with gambling activities. In addition, gamblers are more likely to concurrently have various types of debt and assets, assuming a more active position on household balance sheets. However, gamblers do not necessarily have a higher net worth than comparable nongamblers. Gamblers also tend to engage in health-wise risky behaviors, such as smoking and heavy drinking, while paying out-of-pocket on life and health insurance. We present extensive evidence that such behavior differences observed in the data are not primarily due to different degrees of careless reporting to the survey. Rather, we argue that our findings are consistent with the notion that certain consumers, namely, the active participants in personal finance markets, take on gambling as a form of entertainment.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.federalreserve.gov/
More information through EDIRC
|Order Information:||Web: http://www.federalreserve.gov/pubs/feds/fedsorder.html|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Telyukova, Irina A., 2012.
"Household Need for Liquidity and the Credit Card Debt Puzzle,"
University of California at San Diego, Economics Working Paper Series
qt0ww2c04z, Department of Economics, UC San Diego.
- Irina A. Telyukova, 2013. "Household Need for Liquidity and the Credit Card Debt Puzzle," Review of Economic Studies, Oxford University Press, vol. 80(3), pages 1148-1177.
- Telyukova, Irina A., 2007. "Household Need for Liquidity and the Credit Card Debt Puzzle," MPRA Paper 6674, University Library of Munich, Germany.
- Irina A. Telyukova, 2007. "Household Need for Liquidity and the Credit Card Debt Puzzle," 2007 Meeting Papers 515, Society for Economic Dynamics.
- Telyukova, Irina, 2008. "Household Need for Liquidity and the Credit Card Debt Puzzle," University of California at San Diego, Economics Working Paper Series qt4c67r71r, Department of Economics, UC San Diego.
- Irina A. Telyukova & Randall Wright, 2006.
"A Model of Money and Credit, with Application to the Credit Card Debt Puzzle,"
2006 Meeting Papers
45, Society for Economic Dynamics.
- Irina A. Telyukova & Randall Wright, 2008. "A Model of Money and Credit, with Application to the Credit Card Debt Puzzle," Review of Economic Studies, Oxford University Press, vol. 75(2), pages 629-647.
- Irina A. Telyukova & Randall Wright, 2007. "A model of money and credit, with application to the credit card debt puzzle," Working Paper 0711, Federal Reserve Bank of Cleveland.
- John Ameriks & Andrew Caplin & John Leahy, 2003.
"Wealth Accumulation And The Propensity To Plan,"
The Quarterly Journal of Economics,
MIT Press, vol. 118(3), pages 1007-1047, August.
- Li, Geng & Smith, Paul A., 2010. "401(k) LOANS AND HOUSEHOLD BALANCE SHEETS," National Tax Journal, National Tax Association, vol. 63(3), pages 479-508, September.
- Kathleen W. Johnson & Geng Li, 2010. "The Debt-Payment-to-Income Ratio as an Indicator of Borrowing Constraints: Evidence from Two Household Surveys," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(7), pages 1373-1390, October.
- Erik Hurst & Geng Li & Benjamin Pugsley, 2011.
"Are household surveys like tax forms: evidence from income underreporting of the self-employed,"
Finance and Economics Discussion Series
2011-06, Board of Governors of the Federal Reserve System (U.S.).
- Erik Hurst & Geng Li & Benjamin Pugsley, 2014. "Are Household Surveys Like Tax Forms? Evidence from Income Underreporting of the Self-Employed," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 19-33, March.
- Erik Hurst & Geng Li & Benjamin Pugsley, 2010. "Are Household Surveys Like Tax Forms: Evidence from Income Underreporting of the Self Employed," NBER Working Papers 16527, National Bureau of Economic Research, Inc.
- Alexander Michaelides & Francisco J. Gomes, 2005. "Optimal life cycle asset allocation : understanding the empirical evidence," LSE Research Online Documents on Economics 193, London School of Economics and Political Science, LSE Library.
When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2012-18. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs)
If references are entirely missing, you can add them using this form.