Income and lottery sales: transfers trump income from work and wealth

Cletus Coughlin and Thomas Garrett

No 2008-004, Working Papers from Federal Reserve Bank of St. Louis

Abstract: Previous studies have examined the effect of income on lottery ticket expenditures using an aggregate measure of income, usually personal income. Reasons exist, however, for believing that lottery expenditures do not respond equally to all sources of income. This paper examines the propensity to purchase lottery tickets from separate types of income, namely income from earnings, transfer payments, and wealth. Using county-level data for five states, we find evidence that lottery expenditures respond differently to changes in each income type, and that ticket purchases are most strongly influenced by changes in transfer payments. Several policy implications follow from our results.

Keywords: Income; Gambling industry (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (5)

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