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The Psychology Of Lotteries

Lotteries

Lotteries

The lottery is cheap permission to dream about the possibility of a better life. Most players know they won't win. 

People without lots of money are more likely to participate in lotteries. On average, households that make less than $12,400 a year spend 5 % of their income on state lotteries, making it a deeply regressive tax.

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IDEA EXTRACTED FROM:

The Psychology Of Lotteries

The Psychology Of Lotteries

https://www.wired.com/2011/02/the-psychology-of-lotteries/

wired.com

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Key Ideas

Lotteries

The lottery is cheap permission to dream about the possibility of a better life. Most players know they won't win. 

People without lots of money are more likely to participate in lotteries. On average, households that make less than $12,400 a year spend 5 % of their income on state lotteries, making it a deeply regressive tax.

More likely to buy tickets

In an experiment, low-income participants were more likely to purchase lottery tickets when they felt that their income was low compared to a perceived standard. 

The loop

Government-run lotteries appeal to poor people. This causes them to spend a disproportionate amount of their income on lotteries, which contributes to them being poor, which keeps them buying tickets.

Changing the lottery system

There is clearly a demand for playing the lottery. But low-income people spend more of their income on the lottery than other income groups.

  • A solution would be to stop marketing and advertising lotteries that target the poor.
  • States could promote and offer more games that appeal to wealthier players.
  • Financial institutions could issue investment instruments that have lottery-like qualities.

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