Buying a Dream: Alternative Models of Demand for Lotto

Existing lotto demand models utilize effective price, computed as the face value of a ticket minus the expected value of prize money per ticket, as their primary explanatory variable. By contrast, this article proposes a key role for consumption benefit or "fun" in the demand for gambling in general and lotto demand in particular. It develops an alternative model of lotto demand that focuses on the maximum possible prize. When this is tested against the traditional model using data from the U.K. National Lottery, we find that jackpot considerations exert an influence over and above that of variations in effective price.     

Participation and level of play in the UK National Lottery and correlation with spending on other modes of gambling

The paper analyses UK data, collected from the Family Expenditure Survey, for over 6000 households. The focus is on participation in, and level of expenditure on, the national lotto game. Controlling for standard demographic, socio-economic and income variables, and some non-standard lifestyle indicators, it examines correlation between lotto play and expenditure on six other forms of gambling as well as on alcohol and tobacco. Correlations with lotto participation and expenditure are found to be positive and strong in most cases. Implications for the regulation of the gambling sector and for taxation policy are outlined and discussed.     

Lottomania and other anomalies in the market for lotto

This research is concerned with the determination of the demand for “lotto” in Israel. While an important focus of our research is upon the effects on the demand for lotto of ticket pricing and jackpot announcements, we also investigate several empirical phenomena that are apparently inconsistent with expected utility theory. These include an effect we call “lottomania” which is induced by rollover, and “prize fatigue” when the jackpot does not increase. Another aberration from expected utility theory is that the underlying odds of winning have no measurable effect on sales.     

Modelling of how lotto players select their number combinations dynamically

By examining a unique dataset, the authors build a time series model that can describe the dynamics of lotto players’ betting behaviour. The results are derived from a database maintained by a lottery operator in Taiwan, which consists of number combinations selected by players for 203 consecutive draws in 2 years, including those placed through certain systematic schemes. The dynamic models that the authors established show that the players’ number selection over time is influenced by three factors: the numbers that they chose in the last draw, the winning numbers of the previous draw and the numbers with the highest observed winning frequencies in the past. The first factor reflects the mean-reverting nature of the lotto players’ selection behaviour. The second reaffirms the well-known gambler’s fallacy in which players believe that they can improve their chances of winning by avoiding numbers that recently won. The third exhibits the players’ bias towards certain numbers with an above-average probability to be drawn. The two latter types of misconceptions are found to be more predominant in systematic betters, which suggests that the extent of the lotto players’ behavioural biases may vary according to how they place their bets.     

Jackpot size and lotto sales: Evidence from Ohio, 1986–1987

The impact of lotto jackpot size on sales is estimated using regression analysis on Ohio data for 1986–87. Sales accelerate as jackpots increase. This helps explain high variability in lottery net revenue, and implies that changes in game structure that lead to larger jackpots will increase net revenue. It was also found that Saturday drawings are more popular than Wednesday drawings, that sales increase less than proportionately when more days are available to purchase tickets, and that larger jackpots continue to increase sales even after they have been awarded.Thanks go to H. Roy Kaplan for help in obtaining the data for this paper.     

Estimating customer utility of energy efficiency standards for refrigerators

A frequent argument against efficiency standards is that they prohibit products that represent optimal choices for customers and thus lead to reduced customer utility. In this paper we propose and test a method to estimate such losses. Conjoint analysis is used to estimate utility functions for individuals that have recently bought a refrigerator. The utility functions are used to calculate the individuals' utility of all the refrigerators available in the market. Revealed utility losses due to non-optimal choices by the customers seem consistent with other data on customer behaviour. The same utility estimates are used to find losses due to energy efficiency standards that remove products from the market. Contrary to previous claims, we find that efficiency standards can lead to increased utility for the average customer. This is possible because customers do not make perfect choices in the first place.     

Wer spielt, hat schon verloren?

How actors decide to value goods is a central research question in economic sociology. The demand for lottery tickets is of particular interest because it poses a specific paradox: the expected monetary value of a ticket is about half of its purchasing price. The demand for lottery tickets thus seems to be economically irrational. Nevertheless, millions of people buy national lottery tickets every week. How can there be such a large demand in this market? On the basis of representative sruvey data, we test empirical findings using four different theoretical approaches explaining the demand for lottery tickets. We show that socially mediated states of tension and network influences are strong explanatory factors. In the conclusion we discuss implications for the sociology of markets.     

Lottery Gambling: A Review

This paper presents an exhaustive review of the literature on lottery gambling involving numbers games, lotto, and scratch cards. Results provide tentative answers to the question why people buy lotteries, and support the theory of judgment under uncertainty, cognitive theory of gambling, and theory of demand for gambles. Results also indicate some potential addictiveness of this form of gambling. Youths buy different forms of lotteries and the best predictor of their lottery purchases is their parents’ lottery participation. Contrary to the myth that a big lottery win will ruin the winners’ lives, lottery winners tend to be well-adjusted and their life quality seems to improve. Suggestions for future research are discussed.     

The Past and Future of the British Football Pools

The introduction of the treble chance game in 1946 allowed the football (soccer) pools industry to flourish in Britain for nearly fifty years. The focus on size of jackpot led to very high concentration in the sector. The near-monopoly situation facilitated a much higher take-out rate than in other gambling media, a situation fully exploited by the government through the tax system. The importance of the pools industry delayed the introduction of a competing state lottery but, when it was eventually introduced in 1994, the impact on the pools was severe. Much higher costs in pools than in lottery operation make it unlikely that the pools can avoid withering away in the face of much more attractive jackpot prizes available in lotto. The pools industry response has included a new joint product with the lottery but it has proven a costly failure. Reasons for the failure are discussed.     

THE EFFECT OF BUSINESS CYCLES ON GROWTH: KEYNES VS. SCHUMPETER

In contrast to recent 'neo-Schumpeterian' models, which argue that business cycles are good for growth, we develop a 'neo-Keynesian' model, where monopolistically competitive firms set prices and produce output in advance of the realization of (stochastic) monetary velocity. In such a setting, there is an asymmetry in the effect of business cycles on income: recessions are bad, because the representative firm is demand-constrained and its unsold output is wasted, but booms are not good, because the firm is output-constrained and cannot produce any more output. A more severe business cycle thus reduces the expected income of a firm, and the expected return to investment, which reduces the growth rate of the economy. ( JEL E32, E52, O41, L13)     

Profiling Lady Luck: An Empirical Study of Gambling and Problem Gambling Amongst Female Club Members

This paper helps to address a deficiency of gender-specific research into gambling. It focuses on gambling participation, gaming machine play, and problem gambling amongst 1,257 female respondents to a telephone survey of 3,000 members selected randomly from the membership lists of six of the largest clubs in Sydney, Australia. Using predominantly non-parametric tests, results identify a range of behaviors that characterize the gambling activities of female club members when compared to their male counterparts. Testing four hypotheses revealed that, when compared to male club members, the females had a higher preference for bingo, lotto, lotteries, pools, and gaming machines; they gambled less frequently on off-course and on-course betting, casino table games and hotel gaming machines, but more frequently on bingo; they were more likely to display patterns of gaming machine play that maximize playing time; and they experienced problem gambling at levels comparable to males. Further research questions arising from the study's findings are discussed.     

Risk attitudes and risky behavior

In economic theory, risk aversion is a characteristic of the typical utility function of money. Observations of how people deal with risks in real life have cast some doubts on the prevalence of risk aversion. People buy insurance, but they also gamble and take investment risks. Many of the conclusions in the discussions of utility derive from experiments employing some kind of lottery choices. While the experiments have given interesting ideas for theory, there has been little testing of the extent to which the obtained measures of risk attitudes correlate with actual behavior. Data from the VSB panel were used to answer three questions: (1) Can hypothetical risky choice questions be meaningfully answered by ordinary survey respondents? (2) What are the relationships between different measures of risk attitudes and actual portfolio choices of risky assets? (3) What is the relationship between risk attitude and playing in lotteries, lotto, etc.?     

Updates of the Prevalence of Problem Gambling in Romanian Teenagers

The aim of this study was to find out what is the prevalence of pathological in Romanian teenagers. We questioned one thousand thirty-two teenagers in Cluj-Napoca and Harghita counties. Participants completed a questionnaire with 40 items including gamblers anonymous twenty questions. The sample included teenagers aged 11–19 years; 65.57% were male and 34.43% were female. The subjects were divided into three groups: non-gambling/recreational gambling or occasional gambling (0–1 positive answers —Level 1)—753 subjects (72.96%) [316 females and 437 males]; problem gambling (2–6 points—Level 2)—243 subjects (23.54%) [43 females and 200 males]; pathological gambling (above 7 points—Level 3)—36 subjects (3.48%) [3 females and 33 males]. The mean age of pathological gamblers was 16.48 years. Gender differences were as expected, males engaging in pathological gambling (91.66% from pathological gamblers) more than females did (8.33% from pathological gamblers). Data revealed that the most encountered games practiced weekly were sport bets and slot machines in the case of 36.11% of the pathological gamblers; lotto, internet casino and pool bets each with 25%, followed by roulette and black-jack with 22.22%.From those who reported practicing gambling at a pathological level 66.66% engaged in alcohol consumption, 13.88% illicit drug use and 19.44% licit drugs. Just 16.66% smoke cigarettes. Data revealed higher rates of prevalence in Romanian teenagers than in other Central and Eastern European countries. A prevalence study at a national level should be designed.     

Measuring Socio-Demographic Differences in Volunteers with a Value-Based Index: Illustration in a Mega Event

The phenomenon of volunteering can be analysed as a consumer experience through the concept of value as a trade-off between benefits and costs. In event volunteering, both the expected value (pre-experienced) and the perceived value (post-experienced) of volunteering can be assessed. With this purpose, an online quantitative survey is conducted with a sample of 711 volunteers in a religious mega event, with questions related to five dimensions of their experience: efficiency, social value, play, spirituality and time spent. These five scales, properly tested are used for building a multidimensional index of both the expected and perceived value of the volunteer experience. ANOVAs test show significant differences on the index in both moments upon the socio-demographic profiles: negative expectations/experience balance by age, contrasted results by sex, and more experienced volunteers being more critical with the value experienced. Implications for event managers are proposed, in line with the motivation of volunteers.     

Sociology’s self-imposed moral dilemma

A dilemma confronts sociologists in the review and publication of their works. On the one hand, sociologists are expected to be open and fair in the review process; on the other hand, because we rely on a peer review process, and because peers are apt to know the work of one another, this will impede the practice of making “open and fair” judgments. The article points out that peer review is especially apt to impede new and critical thinking. Other implications are also discussed.     

Parents’ Expectations About Childrearing After Divorce: Does Anticipating Difficulty Deter Divorce?

Divorce is costly for parents because of the challenges of meeting children’s economic and socioemotional needs after separation. Using the National Survey of Families and Households (N= 1,935), we investigate whether expected economic and parenting costs deter divorce. Mothers expect higher economic costs than fathers, whereas fathers expect more parenting difficulties. Most parents, however, expect high economic and parenting costs. In a large minority of families, mothers and fathers differ in their expected costs. Parenting costs deter divorce, but economic costs do not once other family characteristics are controlled. When parents disagree, mothers’ parenting concerns are a greater barrier to divorce than fathers’ concerns. Finally, parenting costs are a greater barrier to divorce for unhappy than happy couples.     

Spousal,Family and Gender Effects on Expected Retirement Age for Married Pre-retirees

The overall purpose of this study was to examine the degree to which retirement is a contextually embedded, family decision rather than an individualized, male-centric one. Using data from a 2010 survey of married pre-retirees ages 35–70 in Michigan, US, we created a General Linear Model to predict expected retirement age. The model incorporated the effect of spousal and family variables on expected retirement age, and because the work/family interface is highly gendered, we explored interactions with gender. The study used a life course perspective in its framing and analysis, and found that expected retirement age was related to both personal and family characteristics and that the relationship of spousal and family factors were gendered and complex.     

The impact of the daily lottery on the numbers game: Does legalization make a difference?

There has been a profusion of state run legal lotteries over the last two decades. One justification for them has been their supposed diversion of funds from illegal games known as numbers, policy and bolita. Records obtained in a police raid in south Florida provided an opportunity to analyze the impact of Florida' legal lottery on its illegal counterpart. The records ranged over a 13 week period encompassing five weeks prior to the inception of Florida's legal daily numbers and lotto games and seven weeks afterward. While there was a 17 percent decline in monies wagered on the illegal games during the first week of the legal games, illegal wagers quickly rebounded to prelegalization levels.An earlier version of the paper was presented at the annual meeting of the Academy of Criminal Justice Sciences, Washington, D.C., March 1989. The authors wish to express their deep appreciation to the Metro-Dade Police Department, Miami, Florida, and particularly to Max Schuman and Sgt. James Boyd for their assistance in this research.     

THE SPATIAL DISTRIBUTION OF BLACK EMPLOYMENT BETWEEN THE CENTRAL CITY AND THE SUBURBS

The share of fast food restaurant jobs held by blacks is smaller in the suburbs than in the central city. This is of interest because expected wages are higher in the suburbs. Estimating a model of the racial composition of the restaurant's workforce, we find that 36 percent of the difference in black employment share between central city and suburban firms is attributable to the fact that suburban firms are less frequently served by public transit. City/suburban differences in the race of managers and customers also play an important role, accounting for 29 percent of the difference.     

Work hours and wage inequality: Evidence from the 2004 WERS

This paper uses the 2004 wave of the Workplace Employment Relations Survey to test whether work hours and wage inequality are positively correlated because of financial incentives associated with inequality. Workers may work longer hours in order to increase their expected income through performance pay or promotion, resulting in a positive correlation between inequality and work hours. Contrary to other work, it is found that the relationship between wage inequality and the occupation and firm level and work hours cannot be attributed to the effect of financial incentives. Demand constraints faced by workers explains the positive correlation between occupation inequality and work hours attributed to financial incentives by others.