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Consumer Behaviour in Lotto Markets: The Double Hurdle Approach and Zeros in Gambling Survey Data

Author

Listed:
  • Humphreys, Brad

    () (University of Alberta, Department of Economics)

  • Lee, Yang Seung

    () (University of Alberta, Department of Economics)

  • Soebbing, Brian

    (University of Alberta, Faculty of Physical Education and Recreation)

Abstract

Governments world-wide increasingly rely on gambling revenues, increasing the importance of understanding who gambles and why. Previous literature used Tobit and Heckman models to statistically analyze participation in gambling. These models make strong assumptions about the nature of gambling participation. We examine the double hurdle model as an alternative to other statistical approaches to modeling gambling participation and spending. Our results, based on data from a 2002 survey of gambling prevalence in Alberta, clearly prefer the double hurdle mode, which yields different results than the commonly used Tobit model.

Suggested Citation

  • Humphreys, Brad & Lee, Yang Seung & Soebbing, Brian, 2009. "Consumer Behaviour in Lotto Markets: The Double Hurdle Approach and Zeros in Gambling Survey Data," Working Papers 2009-27, University of Alberta, Department of Economics.
  • Handle: RePEc:ris:albaec:2009_027
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    File URL: https://sites.ualberta.ca/~econwps/2009/wp2009-27.pdf
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    References listed on IDEAS

    as
    1. Garcia, Jaume & Labeaga, Jose M, 1996. "Alternative Approaches to Modelling Zero Expenditure: An Application to Spanish Demand for Tobacco," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 489-506, August.
    2. 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.
    3. Brad R. Humphreys & Jane E. Ruseski, 2007. "Participation In Physical Activity And Government Spending On Parks And Recreation," Contemporary Economic Policy, Western Economic Association International, vol. 25(4), pages 538-552, October.
    4. 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.
    5. Andrew Worthington & Kerry Brown & Mary Crawford & David Pickernell, 2007. "Gambling participation in Australia: findings from the national Household Expenditure Survey," Review of Economics of the Household, Springer, vol. 5(2), pages 209-221, June.
    6. Blundell, Richard & Ham, John & Meghir, Costas, 1987. "Unemployment and Female Labour Supply," Economic Journal, Royal Economic Society, vol. 97(388a), pages 44-64, Supplemen.
    7. Chad P. Bown, 2005. "Participation in," World Bank Economic Review, World Bank Group, vol. 19(2), pages 287-310.
    8. Andrew M. Jones, 2012. "health econometrics," The New Palgrave Dictionary of Economics, Palgrave Macmillan.
    9. Jones, Andrew M, 1989. "A Double-Hurdle Model of Cigarette Consumption," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(1), pages 23-39, Jan.-Mar..
    10. John Sawkins & Valerie Dickie, 2002. "National Lottery participation and expenditure: preliminary results using a two stage modelling approach," Applied Economics Letters, Taylor & Francis Journals, vol. 9(12), pages 769-773.
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    Cited by:

    1. 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.
    2. Frank Crowley & John Eakins & Declan Jordan, 2012. "Participation,Expenditure and Regressivity in the Irish Lottery:Evidence from Irish Household Budget Survey 2004/2005," The Economic and Social Review, Economic and Social Studies, vol. 43(2), pages 199-225.

    More about this item

    Keywords

    gambling; censored regression; double hurdle model;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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