The Economics of Lottery and Public Choice


The NASPL (National Association of State and Provincial Lotteries) reported sales numbers for all 50 states, the District of Columbia and Puerto Rico for 2003. Overall, sales decreased in nine states. The sharpest decline was in Delaware, where sales decreased 6.8%. However, sales increased in West Virginia, Florida, Puerto Rico and Missouri. In addition, NASPL reported that the number of tickets sold by these three states increased by a combined 67.5%.

Economics of lotteries

This book reviews the literature on the Economics of Lotteries and examines their impact on public finances and consumer rationality. It discusses public choice and tax efficiency, earmarking of revenues, and the horizontal and vertical equity of lotteries. The second part examines the decision of individual states to participate in public lotteries, and its implications for policy. Ultimately, the Economics of Lotteries and Public Choice will be an important resource for scholars and policymakers alike.

Distribution of winnings

The distribution of lottery winnings is usually done in a lump sum payment, although it is possible to receive your prize over several years. You can also opt to receive your money in an annuity. However, the amount you receive will not exceed the value of the jackpot cash. If you win a lotto jackpot, you can split the amount among several people. In such cases, your share of the jackpot will be the same as the amount you contributed.

Regressivity of participation among lower-income people

There is little evidence to suggest that participation among lower-income people is regressive. The study uses the Index (town hall and evaluation) as its measure of participation. Its magnitudes can be interpreted in terms of standard deviation units. The dotted line shows the average treatment effect and 95% CI, and the gray squares represent the point estimate of the treatment effect at each quantile. The time gap between the start of the campaign and the measurement of the outcome is random, as were the timing of the campaign and measurement of the treatment effect. However, the magnitude of the treatment effect is 1.95 for the first quantile.

Costs of operating lotteries

According to a study, the District of Columbia’s lottery spends more than half of its revenues on overhead costs, while giving a much smaller percentage to the city government. Despite this, the lottery managed to generate $40 million in its first five months. Of this, 24 percent went toward administrative expenses, including advertising, sales promotion, and consultant advice. Only two states spend more. Nevertheless, costs are not the only concern of lottery officials.

Economic impact of lotteries on low-income people

State-sponsored lotteries have become a major source of revenue for states, but their payout rates are not high enough to make them attractive to low-income individuals. While state officials often sing the praises of the benefits of lottery proceeds, these participants often view the games as mere entertainment. Many low-income individuals view the games as a convenient way to raise their standard of living. They also may be desperate to escape their situation, and the allure of winning the lottery is too alluring to resist.