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The Impact of Education Earmarking on State-Level Lottery Sales

Stivender Carol O. (), Paul Gaggl (), Amato Louis H. () and Farrow-Chestnut Tonya E. ()
Additional contact information
Amato Louis H.: Department of Economics, University of North Carolina at Charlotte, 9201 University City Blvd., Charlotte, NC 28223, United States of America
Farrow-Chestnut Tonya E.: Department of Geography, University of North Carolina at Charlotte, 9201 University City Blvd., Charlotte, NC 28223, United States of America

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 3, 1473-1500

Abstract: Prior research argues that lottery consumers consider how funds are to be used in making lottery purchase decisions. Possible explanations for this behavior include altruism as well as the desire of low-income families to provide educational opportunities within their community. This paper uses a panel of lottery sales for U.S. states covering the period 1980–2000 to test hypotheses regarding the impact of educational earmarking on lottery purchases. Our estimates suggest that states earmarking all or part of their revenue to education experience an increase in lottery sales between 11 % and 25 %, depending on the specification of state trends. Whether the propensity for earmarking to increase sales is viewed positively or negatively depends largely on one’s ethical and moral views of lotteries.

Keywords: lottery; earmarking; education (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1515/bejeap-2015-0158

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