The Income Elasticity of Lottery: New Evidence from Micro Data

Levi Pérez and Brad Humphreys
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Levi Pérez: Department of Economics, University of Oviedo, Asturias, Spain, lperez@uniovi.es
Authors registered in the RePEc Author Service: Levi Pérez

Public Finance Review, 2011, vol. 39, issue 4, 551-570

Abstract: The authors analyze consumer expenditure on the National Lottery in Spain, a popular game with over 100 draws per year and annual turnover of about three billion euros. Based on Tobit estimates using data from two nationally representative surveys, National Lottery players tend to be middle-aged married males with relatively low education. In contrast to previous research, the authors find a strong relationship between lottery expenditure and income, with estimated income elasticities of more than one. A parameter decomposition indicates that the effect of income on expenditure works through existing lottery players, not by attracting new players.

Keywords: Tobit; gambling; income elasticity; lottery; consumer spending (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:39:y:2011:i:4:p:551-570

DOI: 10.1177/1091142111403620

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