Journal of Gambling Studies

, Volume 7, Issue 2, pp 89–98 | Cite as

Lottery expenditure in a non-lottery state

  • John L. Mikesell
Articles

Abstract

One of the major arguments for legalization of lotteries in new jurisdictions in the United States has been the fact that neighboring states, with their own lotteries, have captured lottery purchases from the other jurisdiction's citizens. This paper explores the issue by examining lottery purchase patterns in the state of Indiana prior to the start-up of the Indiana lottery, at a time when three adjacent states offered a variety of lottery product. Tobit analysis is also done on survey data to determine important contributing factors to the decision to play the lottery, as well as individual lottery expenditures. The paper concludes that, even though lottery revenues for a state are regressive, legalization might be justified on the basis of reducing the regressive outflow of revenue to bordering lottery states.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Barron, J. (1989). States sell chances for gold as a rush turns to stampede.The New York Times (National Edition), May 28, pages 1, 14.Google Scholar
  2. Borg, M.O. and Mason, P.M. (1988). The budgeting incidence of a lottery to support education.National Tax Journal, 41, 75–86.Google Scholar
  3. Brenner, R. (1985).Betting on ideas. Chicago: University of Chicago Press.Google Scholar
  4. Brinner, R.E. & Clotfelter, C.T. (1975). An economic appraisal of state lotteries.National Tax Journal, 28, 395–404.Google Scholar
  5. Byerly, E. (1990).State population and household estimates: July 1, 1989. Series P-25, No. 1058. Washington: U.S. Government Printing Office.Google Scholar
  6. Clotfelter, C.T. (1979). On the regressivity of state-operated ‘numbers’ games.National Tax Journal, 32, 543–548.Google Scholar
  7. Clotfelter, C.T. & Cook, P.J. (1987). Implicit taxation in lottery finance.National Tax Journal, 40, 533–546.Google Scholar
  8. Clotfelter, C.T. & Cook, P.J. (1989).Selling hope. Cambridge, Massachusetts and London, England: Harvard University Press.Google Scholar
  9. Heavey, J.F. (1978). The incidence of state lottery taxes.Public Finance Quarterly, 6, 415–426.Google Scholar
  10. Kaplan, H.R. (1988). Gambling among lottery winners: Before and after the big score.Journal of Gambling Behavior, 4, 171–182.Google Scholar
  11. Kaplan, H.R. (1987). Lottery winners: The myth and reality.Journal of Gambling Behavior, 3, 168–178.Google Scholar
  12. Livernois, J.R. (1987). The redistributive effects of lotteries: Evidence from Canada.Public Finance Quarterly, 15, 339–351.Google Scholar
  13. Mikesell, J.L. (1989). A note on the changing incidence of state lottery finance.Social Science Quarterly, 70, 513–521.Google Scholar
  14. Mikesell, J.L. & Zorn, C.K. (1987). State lottery sales: Separating the influence of markets and game structures.Growth and Change, 18, 10–19.Google Scholar
  15. Reece, W.S. (1979). Charitable Contributions: New evidence on household behavior.American Economic Review, 69, 142–151.Google Scholar
  16. Shishko, R. & Rostker, B. (1976). The economics of multiple job holding.American Economic Review, 66, 298–308.Google Scholar
  17. Spiro, M.H. (1974). On the tax incidence of the Pennsylvania lottery.National Tax Journal, 27, 57–62.Google Scholar
  18. Suits, D.B. (1977). Gambling taxes: Regressivity and revenue potential.National Tax Journal, 27, 25–33.Google Scholar
  19. Tobin, J. (1958). Estimation of relationships for limited dependent variables,Econometrica, 26, 26–34.Google Scholar

Copyright information

© Human Sciences Press 1991

Authors and Affiliations

  • John L. Mikesell
    • 1
  1. 1.School of Public and Environmental AffairsIndiana UniversityBloomington

Personalised recommendations