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State lottery revenue: the importance of game characteristics

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  • Thomas A. Garrett
  • Russell S. Sobel

Abstract

Previous studies find state lottery sales are significantly influenced by socioeconomic characteristics of the population. We extend this literature by examining how the overall expected value, the top prize, and the total combinations influence sales after controlling for these other socioeconomic factors. We perform our empirical analysis on an unparalleled set of data that includes information for 135 on-line lottery games in the United States. Our results show that sales are significantly influenced the top prize amount and odds of winning it, but that sales are not significantly affected by the expected value of the remaining lower prizes.

Suggested Citation

  • Thomas A. Garrett & Russell S. Sobel, 2002. "State lottery revenue: the importance of game characteristics," Working Papers 2002-011, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2002-011
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    References listed on IDEAS

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    1. Marilyn Young & Michael Reksulak & William F. Shughart, 2001. "The Political Economy of the IRS," Economics and Politics, Wiley Blackwell, vol. 13(2), pages 201-220, July.
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    Cited by:

    1. S. Capacci & E. Randon & A. E. Scorcu, 2014. "Luck vs Skill in Gambling over the Recession. Evidence from Italy," Working Papers wp918, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Raviv, Yaron & Virag, Gabor, 2009. "Gambling by auctions," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 369-378, May.
    3. Mao, Luke Lunhua & Zhang, James J. & Connaughton, Daniel P., 2015. "Sports gambling as consumption: Evidence from demand for sports lottery," Sport Management Review, Elsevier, vol. 18(3), pages 436-447.
    4. Addison, Tony & Chowdhury, Abdur R., 2003. "A Global Lottery and a Global Premium Bond," WIDER Working Paper Series 080, World Institute for Development Economic Research (UNU-WIDER).
    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. 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.
    7. 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.
    8. Michael A. Trousdale & Richard A. Dunn, 2014. "Demand for Lottery Gambling: Evaluating Price Sensitivity Within a Portfolio of Lottery Games," National Tax Journal, National Tax Association, vol. 67(3), pages 595-620, September.

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    Keywords

    Gambling industry;

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