2009/03/01 by Thomas A. Garrett, Cletus C. Coughlin · 29 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Psychology · #Economics #Elasticity (physics) #Finance #Financial Literacy, Pension, Retirement Analysis #Financial economics #Gambling Behavior and Treatments #Housing Market and Economics #Income elasticity of demand #Labour economics #Lottery #Microeconomics #Panel Study of Income Dynamics #Portfolio #Price elasticity of demand #Public economics #Revenue #Tax revenue
paper · doi:10.17310/ntj.2009.1.04
published in National Tax Journal 62(1), 77-99 (University of Chicago Press)
openalex publication_date 2009/03/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/22
We estimate annual income elasticities of demand for lottery tickets using county-level panel data for three states and find that the income elasticity of demand (and, thus, the tax burden) for lottery tickets has changed over time. This is due to changes in a state's lottery game portfolio and the growth in consumer income more so than competition from alternative gambling opportunities. Trends in the income elasticity for instant and online lottery games appear to be different. Our results raise doubts about the long-term growth potential of lottery revenue and have policy implications for state governments and those concerned about regressivity.