Economic shocks and lottery sales: an examination of Maine State lottery sales

ABSTRACT

Most U.S. states earn significant amount of revenues from lottery sales. However, they are also criticized for promoting the lotteries because they have been seen as taking advantage of poor populations. The purpose of this study is to identify the impact of various economic factors on lottery sales by using zip-code level sales within the state of Maine. The results show that an increase of 1% in unemployment rate results in a 0.38% increase in draw lottery sales, but it has no significant impact on instant lottery sales. This highlights the importance of differentiating between two major types of lotteries.

KEYWORDS:

• Unemployment rate
• lottery sales
• draw lotteries
• instant lotteries
• voluntary tax

JEL CLASSIFICATION:

• D10
• D12
• H00
• L00

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ We merge store-wise sales into zip-code areas due to unavailability of other variables within the same neighbourhoods.

² The descriptive statistics in Table 2 only includes BLS data that were matched with lottery sales and IRS datasets.

³ The descriptive statistics in Table 3 only includes IRS data that were matched with lottery sales and BLS datasets.