Poor Tend to Buy More Lottery Tickets

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Special Report - July 29, 2008
A new study conducted by researchers at Carnegie Mellon University shows that people who are made to believe they are poor tend to purchase more lottery tickets than other groups of people. The study, published in July in the Journal of Behavioral Decision Making, examines previous research that found “lower income individuals spend a higher percentage of their income on lottery tickets than do wealthier individuals.” To find out why this is true, researchers conducted two experiments with low-income participants conducted at a Greyhound bus station in Pittsburgh, Pennsylvania. In the first experiment involving 79 people, researchers asked participants to take a short survey about the city in exchange for $5, and then offered them lottery tickets for purchase. Participants also filled out demographic information on themselves. The first experiment found that those who were made to feel they earned a relatively low salary bought nearly twice as many tickets (1.28 tickets) as those who were made to feel they earned a relatively high salary (.67 tickets). According to the researchers, “Results support the idea that when people are made to feel subjectively poor, they view the lottery as a means to correct for their low-income status.”

In the second experiment involving 83 participants from the same bus station, participants were divided into two groups and asked to take a short survey in exchange for $5. The control group took the same survey as participants in the first study, which asked questions about the city. The experimental group took a survey involving a “series of questions about whether a rich person, middle class person, or poor person would have an advantage or equal chance when it came to eight different outcomes,” such as “winning playing a slot machine” and “being elected mayor.” According to the researchers, “although we did not ask them explicitly whether a rich or poor person would have a better chance of winning the lottery, the questions —particularly the question about playing a slot machine —were intended to make respondents think about the fact that everyone would have an equal chance.” Once again, both groups were given $5 in exchange for their participation, and then offered the chance to purchase lottery tickets. The researchers found that the experimental group purchased more lottery tickets on average (1.31 tickets) than the control group (.54 tickets).

“Study 1 indicates that lotteries are more alluring for poor people because they provide an opportunity to correct for low-income status. Study 2 indicates that part of their appeal is that they are one of the few opportunities available to the poor for a sudden increase in wealth,” the authors explained. “The results of this paper point to a cruel irony. People with low incomes play the lottery, which amounts to effectively burning $.47 on every dollar spent, in part because the cognitions associated with poverty increase the appeal of playing. This creates a vicious cycle. The subjective feeling of poverty leads people to take actions that effectively exacerbate the financial condition which led to the actions in the first place.”

Although the authors stopped short of advocating a ban on state lotteries, they wrote: “In our opinion, states should not be in the business of extracting wealth from poor people, especially when, as we show, the psychological experience of poverty is in part responsible for the attractiveness of lotteries.”