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Articles 1 - 10 of 10
Full-Text Articles in Social and Behavioral Sciences
Should Gambling Markets Be Privatized? An Examination Of State Lotteries In The United States, Kent Grote, Victor Matheson
Should Gambling Markets Be Privatized? An Examination Of State Lotteries In The United States, Kent Grote, Victor Matheson
Economics Department Working Papers
State lotteries currently operate in 43 states across the US. Recently, three states have privatized their lottery operations, handing over the management of their lotteries to private companies in hopes of generating greater revenues for the state governments. Questions arise regarding the economic rationale for this decision and an economic model is presented to determine whether one state, Illinois, has been successful at generating more state transfer revenues as a result of privatization in its first year of results. The issue of lottery privatization is also examined
The Impact Of State Lotteries And Casinos On State, Kent Grote, Victor Matheson
The Impact Of State Lotteries And Casinos On State, Kent Grote, Victor Matheson
Economics Department Working Papers
Over the past half century, there has been an increasing prevalence of legalized gambling in the US. At the same time there is a general recognition, empirically supported in the economics literature, that spending on lottery and gaming products tends to be regressive in nature. In addition, gambling addiction is a widely acknowledged social problem. This raises the question of whether the increased presence of casinos and state lotteries results in relatively more bankruptcy filings in the states that offer them. This paper adds to the existing literature by comparing the relative impact of the presence of lotteries to that …
The Economics Of Lotteries: An Annotated Bibliography, Kent Grote, Victor Matheson
The Economics Of Lotteries: An Annotated Bibliography, Kent Grote, Victor Matheson
Economics Department Working Papers
This paper presents an annotated bibliography of all papers relating to the economics of lotteries as of early to mid 2011. All published scholarly papers that could be identified by the authors are included along with the published abstract where available.
The Economics Of Lotteries: A Survey Of The Literature, Kent Grote, Victor Matheson
The Economics Of Lotteries: A Survey Of The Literature, Kent Grote, Victor Matheson
Economics Department Working Papers
Lotteries represent an important source of government revenues in many states and countries, so they are of interest to public finance economists. In addition, lotteries provide researchers interested in microeconomic theory and consumer behavior with a type of experimental lab that allows economists to explore these topics. This paper surveys the existing literature on lotteries organized around these two central themes. The first section examines the microeconomic aspects of lotteries including consumer decision-making under uncertainty, price and income elasticities of demand for lottery tickets, cross-price elasticities of lottery ticket to each other and to other gambling products, consumer rationality and …
Spreading The Fortune: The Distribution Of Lottery Prizes Across Countries, Victor Matheson, Kent Grote
Spreading The Fortune: The Distribution Of Lottery Prizes Across Countries, Victor Matheson, Kent Grote
Economics Department Working Papers
It has been 15 years since Cook and Clotfelter described the scale economies associated with state-run lotto games in an American Economic Review article entitled “The Peculiar Scale Economies of Lotto.” U.S. states with larger populations are identified as having the ability to offer games with larger jackpots to attract higher sales per capita. The current paper extends this analysis to all current U.S. state and multi-state lotto-style lottery games as well as to a sample of international lotto games for comparative purposes. The development of the two major U.S. multi-state games over time is also examined to illustrate that …
U.S. Lotto Markets, Victor Matheson, Kent Grote
U.S. Lotto Markets, Victor Matheson, Kent Grote
Economics Department Working Papers
Lotteries as sources of public funding are of particular interest because they combine elements of both public finance and gambling in an often controversial mix. Proponents of lotteries point to the popularity of such games and justify their use because of the voluntary nature of participation rather than the reliance on compulsory taxation. Whether lotteries are efficient or not can have the usual concerns related to public finance and providing support for public spending, but there are also concerns about the efficiency of the market for the lottery products as well, especially if the voluntary participants are not behaving rationally. …
Gamblers’ Love For Variety And Substitution Among Lotto Games, Victor Matheson, Kent Grote
Gamblers’ Love For Variety And Substitution Among Lotto Games, Victor Matheson, Kent Grote
Economics Department Working Papers
This paper considers the whether offering multiple lotto games within a state by joining a multi-state lottery increases total ticket sales compared to offering a single state game. The question is considered from two different perspectives, which both lead to the conclusion that states do tend to benefit from increased ticket sales overall by joining a multi-state lottery association. There is, however, a noted difference in the magnitude of that effect depending on the size of the average jackpots of the previously existing state games.
Examining The Halo Effect In Lotto Games, Victor Matheson, Kent Grote
Examining The Halo Effect In Lotto Games, Victor Matheson, Kent Grote
Economics Department Working Papers
The "Halo Effect" occurs when lotto ticket sales are unexpectedly high following a large jackpot. An examination of the Powerball lottery finds evidence that the halo effect exists and that it is the result of bettors exchanging prize winnings for new tickets.
Dueling Jackpots: Are Competing Lotto Games Complements Or Substitutes?, Victor Matheson, Kent Grote
Dueling Jackpots: Are Competing Lotto Games Complements Or Substitutes?, Victor Matheson, Kent Grote
Economics Department Working Papers
This paper considers the relationship that exists between two lottery products offered simultaneously in the same state, a smaller lottery game run by the individual state and a larger multi-state game run in coordination with other states. The primary issue is whether the two different products should be considered substitutes or complements for one another. The question is considered from two different perspectives that lead to a conclusion that while the two products do tend to be complements to one another, overall the individually run state lottery games experience a reduction in sales from the presence of the multi-state game.
In Search Of A Fair Bet In The Lottery, Victor Matheson, Kent Grote
In Search Of A Fair Bet In The Lottery, Victor Matheson, Kent Grote
Economics Department Working Papers
Although state-operated lotto games have the worst average expected payoffs among common games of chance, because the jackpot can accumulate, the maximum expected payoff is potentially unlimited. It is possible, therefore, that lotto can exhibit a positive expected return. This paper examines 18,000 drawings in 34 American lotteries and finds approximately 1% of these drawings provided players with a fair bet. If it were possible for a bettor to purchase every possible combination, however, most lotteries commonly experience circumstances where such a purchase would provide a positive return with 11% of the drawings providing a fair bet to the player.