Nationalist sentiment and lottery markets: Evidence from Catalonia

ABSTRACT

To what extent nationalist sentiments affect economic behavior is still an open question. In this paper a study of emerging and competing lottery markets in the same jurisdiction (Catalonia, a Spanish region) is conducted to explore the impact of such nationalistic feelings in the demand for gambling. The use of panel data allows controlling for changing economic and demographic conditions at the province level and their potential effect on the analyzed lottery markets. The results from a difference-in-difference regression analysis indicate that a statistically significant but limited impact of the introduction of the new lottery exists, suggesting that the observed shift in the existing market demand may respond, beyond mere economic determinants, to behavioral biases (e.g. identification feeling with the new lottery).

KEYWORDS:

• Nationalism
• sentiment bias
• lottery demand
• difference-in-difference regression

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Funding sources

The first author acknowledges financial support from grant MINECO-ECO2017-83668-R of the Ministerio de Economía y Competitividad (Gov. of Spain) to carry out this research. The funding body had not any role in design, in the collection, analysis, and interpretation of data; in the writing of the manuscript; and in the decision to submit the manuscript for publication.

Constraints on publishing

No constraints on publishing were declared by the authors in relation to this manuscript.

Competing interests

No competing interests were declared by the authors in relation to this manuscript.

Preregistration statement

No preregistration was declared by the authors in relation to this manuscript.

Data availability statement

No data set was declared by the authors in relation to this manuscript.

Notes

1. El Gordo is the term commonly used by people to refer to both the jackpot and the lottery itself and this is why we use this name in the paper. But there is also a lotto type state-operated game which is called El Gordo de la Primitiva and that has nothing to do with the Christmas draw of the Spanish National lottery.

2. Governments have authorized lotteries primarily as a means of generating non-tax revenues. These lottery revenues are often earmarked for particular public purposes (good causes) such as education, or, in general, economic development. This use of lotteries as a public finance tool has justified the state regulation of these markets, sometimes operated under a public monopoly organization.

3. Cuadras-Morató and Raya (2016) analyze how the conflict between Catalonia and Spain affected the sales of Catalan sparkling wine (cava) in both Catalonia and the rest of Spanish regions. Their results provide evidence of different reactions in different territories.

4. This is the total amount of the jackpot prize that would correspond to all the issued tickets of the winning number. It is usually shared by a significant number of lottery winners. For instance, in the 2018 draw, the jackpot winners were spread across six different Spanish cities: Badajoz, Bilbao, Cuenca, Gernika, Granada and Huesca.

5. The Epiphany draw is known by Spaniards as El Niño for two main reasons: historically, its antecedent was a raffle held between 1878 and 1818 to raise funds to build the children’s hospital of Niño Jesús in Madrid; and, basically, because in Spain the Epiphany is mainly called the Children’s Day – it is when children receive their biggest presents in the year. Child is the English word for Spanish Niño.

6. All lottery tickets that match their last digit with that from the winning number can claim for the refund of the ticket price.

7. According to the last figures from the Survey on language uses of the population in Catalonia, Catalan is the usual language for 36.1% of the population and Spanish for 48.6%.

8. Even though the descriptive analysis here focuses on El Gordo, it would be practically applicable to the case of El Niño. Corresponding figures are available on request.

9. Notice that, besides selling winning tickets several times, the name of the town, Sort (Luck), and the name of the outlet, La Bruixa d’Or (The Golden Witch), are also contributing to the attractiveness of this place for lottery consumers.

10. Both ‘Gordo’ and ‘Grossa’ words mean ‘fat’ but the first one is male in Spanish and the second one female in Catalan.

11. Notice that this a particular case of a model which provides a rationale for the use of synthetic control methods in comparative case studies (Abadie et al., 2010) where the effect of the unobserved individual effects is constant through time.

12. It must be pointed out that these results hold if we use a linear, instead of a log linear, specification for the demand equation.

13. These figures correspond to the votes obtained by the coalitions Esquerra Republicana de Catalunya-Catalunya Sí, and Democràcia i Llibertat in the Spanish general elections and by the coalitions Junts pel Sí and Candidatura d’Unitat Popular in the Catalan regional elections.

Additional information

Notes on contributors

Jaume García

Jaume García is a professor of applied economics in the Department of Economics and Business at Universitat Pompeu Fabra. He received his PhD in economics from London School of Economics.

Levi Pérez

Levi Pérez is associate professor of economics in the Department of Economics at University of Oviedo. He received his PhD in economics from the University of Oviedo. He holds a university expert degree in Advanced Methods in Applied Statistics from the National University of Distance Education (UNED).