Lotteries, Liberty, and Legislatures

57 Pages Posted: 28 Apr 2000

Date Written: February 2000

Abstract

The central purpose of this paper is to show that lottery play is not economically irrational and uninformed. The paper presents a theory of lottery tickets not as misguided inputs into wealth production as some critics believe but as valuable inputs in creating a sense of open-ended possibility, specifically the possibility of escaping one's current life by acquiring great wealth. In the course of the discussion the claim that the lottery is a regressive tax is investigated and a variety of empirical predictions are generated as to patterns of purchase both across groups and by individuals. Finally the insights gained from the earlier discussion are employed as a springboard to reground the normative use of the assumption of rational utility maximization.

JEL Classification: H29

Suggested Citation

Cohen, Lloyd R., Lotteries, Liberty, and Legislatures (February 2000). Available at SSRN: https://ssrn.com/abstract=210008 or http://dx.doi.org/10.2139/ssrn.210008

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