Buying a dream: alternative models for demand for lotto

Forrest, DK; Simmons, R; Chesters, N

Abstract

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.

Citation

Forrest, D., Simmons, R., & Chesters, N. (2002). Buying a dream: alternative models for demand for lotto. Economic Inquiry, 40(3), 485-496. https://doi.org/10.1093/ei/40.3.485

• Journal Article Type: Article
• Publication Date: Jul 1, 2002
• Deposit Date: Oct 23, 2007
• Journal: Economic Inquiry
• Print ISSN: 0095-2583
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 40
• Issue: 3
• Pages: 485-496
• DOI: https://doi.org/10.1093/ei/40.3.485
• Publisher URL: http://dx.doi.org/10.1093/ei/40.3.485