Although state lotteries, on average, return just 53 cents for every dollar spent on a ticket, people continue to pour money into them — especially low-income people, who spend a larger percentage of their incomes on lottery tickets than do the wealthier segments of society. A new Carnegie Mellon University study sheds light on the reasons why low-income lottery players eagerly invest in a product that provides poor returns.
In the study published in the Journal of Behavioral Decision Making, participants who were made to feel subjectively poor bought nearly twice as many lottery tickets as a comparison group that was made to feel subjectively more affluent. The Carnegie Mellon findings point to poverty's central role in people's decisions to buy lottery tickets.
"Some poor people see playing the lottery as their best opportunity for improving their financial situations, albeit wrongly so," said the study's lead author Emily Haisley, a doctoral student in the Department of Organizational Behavior and Theory at Carnegie Mellon's Tepper School of Business. "The hope of getting out of poverty encourages people to continue to buy tickets, even though their chances of stumbling upon a life-changing windfall are nearly impossibly slim and buying lottery tickets in fact exacerbates the very poverty that purchasers are hoping to escape."
The researchers influenced participants' perceptions of their relative wealth — or lack thereof — by having them complete a survey on their opinions of the city of Pittsburgh that included an item on annual income. The group made to feel poor was asked to provide its income on a scale that began at "less than $100,000" and went upward from there in $100,000 increments, ensuring that most respondents would be in the lowest income category. The group made to feel subjectively wealthier was asked to report income on a scale that began with "less than $10,000" and increased in $10,000 increments, leading most respondents to be in a middle or upper tier.
Participants, who were recruited at Pittsburgh's Greyhound Bus terminal, were paid $5 for completing the survey and given the opportunity to buy as many as five scratch-off lottery tickets. The experimental group purchased an average of 1.27 lottery tickets, compared with 0.67 tickets bought by the members of the control group.
A second experiment reported in the paper found that indirectly reminding participants that, while different income groups face unequal outcomes in education, jobs and housing, everyone has equal chances of winning the lottery induced an increase in the number of lottery tickets purchased. The group given this reminder purchased 1.31 tickets, compared with 0.54 for the group not given such a reminder.
In the study, the researchers note that lotteries set off a vicious cycle that not only exploits low-income individuals' desires to escape poverty but also directly prevents them from improving upon their financial situations. They recommend that state lottery administrators explore strategies that balance the economic burdens faced by low-income households with the need to maintain important funding streams for state governments.
"State lotteries are popular revenue sources that are unlikely to go away anytime soon," said George Loewenstein, a study co-author and Herbert A. Simon professor of economics and psychology at Carnegie Mellon. "However, it is possible to implement measures that can actually benefit low-income lottery players and lead to fairer outcomes." Loewenstein noted that one such potential method for addressing income inequality, which has shown promise in other countries, is tying lottery tickets to savings accounts.
Romel Mostafa, a graduate student in Carnegie Mellon's Department of Social and Decision Sciences, also was a study co-author. The research was funded in part by a grant from the Russell Sage Foundation.
- PHYSICAL SCIENCES
- EARTH SCIENCES
- LIFE SCIENCES
- SOCIAL SCIENCES
Subscribe to the newsletter
Stay in touch with the scientific world!
Know Science And Want To Write?
- Could Astronauts In The ISS Get All Their Oxygen & Food From Algae & Plants?
- Thou Shalt Have One Higgs - $100 Bet Won !
- FDA Stiffs Go Soft On Pink Viagra
- Like Cigarettes Or Booze, E-Cigarettes Can Be Dangerous To Children
- Stem Cell Research Informed Consent: What To Know
- Breast Cancer Study Misunderstood By Its Authors
- The False Fear Of ‘Toxic Breast Milk’
- "I'm not saying it is fabricated, but it is only one of many scriptures in the world. The Hindus..."
- "this article is not being truthful!its basically saying biblical truth is fabricated!! no one will..."
- "Bottom line is any drug with fluoride in it should be black boxed and restricted to life and death..."
- "I agree. No need to bet to enjoy the race, whatever time it takes. I do hope that the LHC experimenters..."
- "LOL! I laughed so hard at this article! This was before its time- love it. I am the Celiac who..."
- Goth teens more vulnerable to depression and self-harm
- 15 percent of cigarettes sold in NYC have illegal tax stamps
- Humans may be harmed by endocrine disrupting chemicals released during fracking, according to review
- Infliximab biosimilar approved in Australia - lower cost is great, but questions about safety remain
- The radiationless revolution in electromagnetics
Books By Writers Here