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Demand for Lottery Products: A Cross-Country Analysis

Author

Listed:
  • Maria João Kaizeler
  • Horácio C. Faustino

Abstract

Varieties of lottery games are played regularly in more than half of the world’s countries. When considering the probability of winning a lottery jackpot, we have a sense of the illogicality in buying a lottery ticket. This begs the question, why do people buy lottery products? This paper investigates the socio-economic and demographic features that help to explain the behavioural trend of lottery product purchasing throughout the world. With a multivariate linear regression analysis, this study uses macroeconomic data and qualitative variables to explain the variation of a country’s per-capita lottery sales. Some very interesting results were obtained. For example, the higher a country’s level of education, percentage of males and Christians, the higher are the lottery sales. The relationship between lottery sales and per-capita GDP is an inverted U: lottery sales increase simultaneously with increases in per-capita GDP up to a point and then start to decrease. These results are of interest because they suggest a link between certain socio-economic and demographic characteristics and consumer behaviour and may give a boost to the use of these characteristics in consumer research.

Suggested Citation

  • 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.
  • Handle: RePEc:ise:isegwp:wp332008
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    References listed on IDEAS

    as
    1. David Giacopassi & Mark W. Nichols & B. Grant Stitt, 2006. "Voting for a Lottery," Public Finance Review, , vol. 34(1), pages 80-100, January.
    2. 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.
    3. Kearney, Melissa Schettini, 2005. "State lotteries and consumer behavior," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2269-2299, December.
    4. Brad M. Barber & Terrance Odean, 2001. "Boys will be Boys: Gender, Overconfidence, and Common Stock Investment," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 261-292.
    5. Charles T. Clotfelter & Philip J. Cook, 1989. "The Demand for Lottery Products," NBER Working Papers 2928, National Bureau of Economic Research, Inc.
    6. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279-279.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Gambling; Lotteries; Education; Religiosity; Culture; Cross-country.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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