Study: The Poorer You Feel, The More Lottery Tickets You Buy

Very Short List notes that “America’s lotto kiosks are currently reporting heretofore unheard-of earnings,” despite the average rate of return—53%—being less than slot machines. Researchers at Carnegie Mellon recently completed a study in which they primed people to feel relatively poor, then offered them a chance to buy lottery tickets, and the results suggest that the poorer you feel, the more likely you’ll waste your money on a lottery.

From the Carnegie Mellon article:

The researchers influenced participants’ perceptions of their relative wealth — or lack thereof — by having them complete a survey on their opinions of the city of Pittsburgh that included an item on annual income. The group made to feel poor was asked to provide its income on a scale that began at “less than $100,000″ and went upward from there in $100,000 increments, ensuring that most respondents would be in the lowest income category. The group made to feel subjectively wealthier was asked to report income on a scale that began with “less than $10,000″ and increased in $10,000 increments, leading most respondents to be in a middle or upper tier.

Participants, who were recruited at Pittsburgh’s Greyhound Bus terminal, were paid $5 for completing the survey and given the opportunity to buy as many as five scratch-off lottery tickets. The experimental group purchased an average of 1.27 lottery tickets, compared with 0.67 tickets bought by the members of the control group.

A second experiment reported in the paper found that indirectly reminding participants that, while different income groups face unequal outcomes in education, jobs and housing, everyone has equal chances of winning the lottery induced an increase in the number of lottery tickets purchased. The group given this reminder purchased 1.31 tickets, compared with 0.54 for the group not given such a reminder.

In the study, the researchers note that lotteries set off a vicious cycle that not only exploits low-income individuals’ desires to escape poverty but also directly prevents them from improving upon their financial situations. They recommend that state lottery administrators explore strategies that balance the economic burdens faced by low-income households with the need to maintain important funding streams for state governments.

Here’s an idea, although the fact that we came up with it in 30 seconds probably means it’s a terrible one: just mail a free lottery ticket to every household below the poverty line once a month.

“Why Play a Losing Game? Carnegie Mellon Study Uncovers Why Low-Income People Buy Lottery Tickets” [CMU via Very Short List]
(Photo: Kim Scarborough)

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  1. roche says:

    If you are getting less than 53% return playing Blackjack you have no idea what you are doing. If you follow the basic strategy it has one of the highest returns of any casino game. Even a dummy can learn how to play properly and get at least 98% return on a table with decent rules.

    • @roche: Oops, that was supposed to have been deleted before I hit “publish.” Will edit now. Thanks for catching that.

      • roche says:

        @Chris Walters:

        No worries.

        Blackjack at low limits is one of the few games anyone on this blog should play.

        Find a cheap game in Vegas with a minimum bet of 3 dollars and you will drink more than you spend if you follow the system.

    • mac-phisto says:

      @roche: you would think that, but my luck sucks on that table. i think i hold an international record for number of pulls that total between 13 & 15. i once sat at a table & lost 25 consecutive hands (& that was with a strategy).

      i play the dice instead – odds are just as good (some say they’re better), & it’s rare that i don’t walk away with decent return.

    • ludwigk says:

      @roche: Blackjack and Craps both have a decent return if you know how to play (I’m not particularly good at either). With just a little bit of strategy, you can play for hours and at the least break even.

      When you factor in entertainment + drinks + ∂($) for the evening, they are optimal casino games to play.

  2. nicemarmot617 says:

    Um, no. I’ve been relatively poor most of my life and I’ve never purchased a single lottery ticket. It’s just gambling. Some people gamble and some don’t. Gamblers gamble more low-cost items when they’re poor.

    • agnamus says:

      @nicemarmot617: You may have been relatively poor, but you’ve apparently never felt so poor that you’re willing to effectively throw away money to buy hope. That’s the point of the study. These people aren’t dumb, but hope (or a lack of it I guess) can make people do dumb things.

      • Pink Puppet says:

        @agnamus: Maybe I’m a cynic at heart, but at my most desperate never once thought I could ‘buy hope’ or anything like that.

        I don’t think there is a threshold for that sort of thing, nor do I think nicemarmot617 was calling them dumb–just prone to gambling.

  3. ShariC says:

    I think that the poor buy lottery tickets because they don’t feel that they are in control of their lives and they look to random chance to improve their lot. Their opportunities (or at least their perception of them) are different than those who grow up better off in many cases.

    It’s not that they are ignorant of the odds, but rather that they have no hope and would rather take a one in a million (or worse) shot than nothing at all.

  4. Ein2015 says:

    I don’t like lottery tickets… I prefer playing poker with friends… at least then I know my money goes to a friend, and not the “house” (in this case, the state).

  5. hills says:

    I believe it – how many filthy rich people win the lottery?!

    • Rachacha says:

      @hillsrovey: I remember seeing a documentary several years ago where a wealthy man backed a project to purchase every winning combination of lottery tickets. His group conducted all sorts of statistical analysis to determine the odds of other people winning with the same number combination, analyzed what numbers statistically come up more often than others and ultimately purchased every probable winning combination when the prize was high enough to split the winnings if someone were also to hit the winning numbers. I am not sure if this is the same group, but here you go: [query.nytimes.com]

    • sponica says:

      @hillsrovey: My senator actually won 700,000 from a Powerball drawing a few years ago. Part of me still hates him for winning while I bought like 10 tickets and won nothing.

  6. Snowlovers says:

    Lotteries are just a tax on people who are bad at math.

    • theczardictates says:

      @Snowlovers: Is there a law that in every lottery thread somebody has to repeat this old saw? Do you think you are the first to say this? Or that there is anybody on the planet who hasn’t heard it? Really, what was the point?

    • timmus says:

      I read it as a veiled comment that’s actually a noble request for less taxes and better math education in this country. Why do you hate math education? :)

    • battra92 says:

      @Snowlovers: Actually I think that’s what Rent-To-Own places are.

      Lotteries are just con-men.

  7. krunk4ever says:

    just mail a free lottery ticket to every household below the poverty line once a month.

    I don’t see exactly how this will help. Do you think by giving a lottery ticket to people under poverty would prevent them from buying additional tickets? I mean in their minds, they’d probably be thinking additional tickets will help double/triple their chances at winning.

    • RandomHookup says:

      @krunk4ever: I miss the free tickets the Mass Lottery used to send out in the mail. It was the only time I ever played the games, but still came out about $50 ahead.

  8. pixiegirl1 says:

    I like the occasional scratch off ticket, ya I’m all into that instant gratification. But I should mention that I don’t spend my money on them I usually bum a dollar off of someone else and then when I loose I tell them that I almost won X amount of money. Its a win-win situation for me if I win I made money if I loose oh well it wasn’t my dollar. :-p

  9. purplesun says:

    I’ve done that, particularly when I’m feeling poor. Bad week, money is tight, I’m feeling hopeless and buried under student loans (my only debt at this time) – dropping one dollar on a quick pick once in a blue moon isn’t going to ruin my budget.

    It does, however, give me cause to dream happily about what I’d do if I happened to win that jackpot.

    It’s worth a dollar and it’s just for fun. I have the potential to get more out of a lottery ticket than I do out of the soda I might have bought instead (at least the lottery ticket isn’t full of empty calories and teeth-rotting HFCS).

    • kmw2 says:

      @purplesun: I agree – a dollar is worth a fifteen minute daydream to me, even though I know what the chances of actually winning are. I think it’s better than a lot of things I could be doing with that dollar. The trick, of course, is that a lot of people don’t spend $1, they spend $100 or more on that same daydream without increasing their chances much. That’s why it’s a problem.

      • ARP says:

        @kmw2: And this is another reason why poor people play. Money doesn’t buy happiness, but it sure doesn’t hurt. When you’re feeling pretty miserable about your situation, a 10 minute daydream about what you’d do with the money is a worthwhile escape for a few dollars. It’s also a lot cheaper than alcohol and less risky than drugs.

        Now, when people spend large amounts of money they don’t really have, then that’s a problem. Unfortunately, I’ve seen that as well- people buy their groceries with a welfare card and then walk right over the lottery machine and buy a LOT of tickets.

    • HogwartsAlum says:

      @purplesun:
      I do this with the Publishers Clearinghouse thing. I occasionally buy magazines through them but I always sent the entry back. It is fun to imagine what I would do if I won. I might win a smaller prize, in any case.

      I’d rather not do a lottery ticket because it’s a dollar. The stamp is cheaper (for now). Even though both of them are a waste of time, at least I’m not wasting a whole buck.

    • whatsthisnow says:

      @purplesun:
      I play it occasionally. Like I drink beer occasionally, or eat donuts occasionally.
      Yeah, it’s a waste of money and not good for me, but so are many many things.
      It’s a dollar for a daydream. Harmless.
      And yeah, people spend loads of money on it, but they’re idiots. If not scratchers, they’d find another destructive way to spend money.

  10. TheSpatulaOfLove says:

    I’m not a big lottery person – the odds are so out there, I never saw the point. I watched my parents spend $10-20 a week on lottery tickets (always the big one, not scratch-offs) and never saw a return on investment. Maybe that’s why I never really got hooked.

    Sure I buy one once in a blue moon for the same reason as purplesun states – an opportunity for some escapism, but I pretty much expect to lose the buck I spend and casually check the numbers a few days later. I maybe buy 2 or 3 a year.

    Now the thing that pisses me off the most is the chuckle-heads who spend their paychecks at the gas station buying scratch-offs and then scratching them at the counter when I’m trying to complete my transaction. I usually make a snarky comment like “Thanks for paying the idiot tax – now go do that somewhere else.”…

  11. CarlinLibolo says:

    Yeah, I know it’s usually a bad bet. However, it gets better and better as the payout grows. For example, Colorado lotto cash payout is currently $4.8 M, and the odds of winning are 1 in 5.2 M – pretty close to even money. If the jackpot is not won and grows for another week, it will be a better than even bet. (If one figures the after-tax payoff that changes the calculation quite a bit.)

    My rationale (and I admit it’s just that) is this: a few bucks a week spent when the payoff is high won’t impact my life a bit. But if I won, it would impact my life very much. Therefore I’m betting nothing with a possibly return of a substantial something.

  12. Triborough says:

    When the jackpot is absurdly high, say $100 to $200 million or so it is worth getting a ticket or two. However, it is instead of another vice like a cupcake, so calories will be saved. The only problem is waiting for the moron who is playing the daily three or four digit lottery and is spending about $50 on tickets per day. That is just crazy.

    • KyleOrton says:

      @Triborough: I’ve thought about that too, but I see it as “worth” it because of the shared experience with so many people doing the same thing. I think it’s neat to have something to talk about with the guy in the elevator or the grocery checker.

      Ignoring that, I totally feel poor and haven’t bought any lottery tickets. Time to step up.

  13. theczardictates says:

    @Snowlovers: Lotteries are just a tax on people who are bad at math

    I call BS. And not just because this old joke stopped being funny or clever about a thousand repetitions ago.

    Buying a lottery ticket isn’t a normal gamble where, for example, you might risk $100 dollars for the chance of a $1000. The odds in the lottery are “an amount of money so small you won’t even notice it” against the chance of “so much money you never have to think about money again”. In practical terms, the effective lottery odds are zero dollars against infinite dollars. For people with no other shot at millions, playing the lottery is perfectly rational.

    • Mozoltov, motherfucker says:

      @theczardictates: Yeah but how many people spend a couple bucks once in a while to people who actively spend $50+ per week hoping they will win. $1 or $2 isn’t bad but when you start spending anything over than that you are truly bad at math, no joking here.

    • K-Bo says:

      @theczardictates: I would agree with you if I hadn’t seen people who can’t even pay their rent spend $20 on lottery tickets in one weekend, and be totally thrilled when they won a total of $10. I mean jumping up and down, acting like they were set for life excited.

      • theczardictates says:

        @K-Bo: I guess I move in the wrong (right?) circles. I’ve never known anybody except the $1 or $2 Worth It For The Fantasizing Alone type. If there wasn’t a lottery would those people be spending $20 more on beer and bowling and jumping up and down if they got a strike?

        But either way, can we please agree to a ban on recyling the “bad on math” joke? It was funny the first time… a long, long time ago…

  14. BuddhaLite says:

    Florida has an even better scam going. For an extra dollar you get an extra $10million and for two more dollars you get an extra $25million if you win. It’s not a one time fee either. You can apply it to each set of numbers. So instead of (minimumly)increasing your chance of winning they’re baiting those people who think they really have a chance of winning each week.

  15. anker says:

    This last week I came across a stack of free county information magazines which was in the waiting room where low income people came to sign up for the food bank, shelter assistance and other free services to help them through.

    The paper consisted of about ten pages. There was only one full page brightly colored ad taken out in this whole county paper, advertising the Michigan state lottery.

    I believe the State of Michigan also recieved a copy of these survey results.

  16. The Lotto is a tax on people bad at math.

    It sickens me how states legalize this type of gambling, swelling their coffers, knowing poor people are the ones paying that unofficial tax.

    • Rectilinear Propagation says:

      The Lotto is a tax on people < bad at math < who are desperate.

      @InfiniTrent: Fixed that for ya.

      Seriously though, does anyone honestly think that people are spending a significant amount of money on lottery tickets because they sat down, thought about it logically, and did the math?

  17. Doormouse says:

    but if you have a system :P

    If you are going to waste your money on scratch tickets (not powerball/etc) buy only brand new games and learn the state defined odds (“1 in 4 tickets win– buy 8).

    the flaw with american culture is the belief in instant gratification– save your money- put it towards what you really need, not some quick fix

  18. timmus says:

    Lottery tickets are nothing but a tax on people who are bad at literature.

    doh!!

  19. snoop-blog says:

    I like craps. I’d rather just go to the boat and play craps or blackjack instead of buying lottery tickets. But that’s mainly because I usually win when I play craps, and have never won even $20 on the lottery.

  20. JollyJumjuck says:

    My luck is really bad at blackjack, poker, craps, horses, and lotteries. I guess whenever there is “random” chance involved. I can probably lose 90% of the time on a series of coin flips.
    It’s incredible how many people who rarely play the lottery actually win it. I worked with someone once who bought a raffle ticket for charity, who said it was the first time he had ever bought anything like that in his life. He won a brand new luxury car.
    Locally a group of people got into a work pool for a few weeks and then won several million dollars.
    A few years ago I read a story of a young woman (20 years old, first time player) who played the lottery using her very recently deceased mother’s numbers but changed one of them to the date of her death and won millions.
    I heard a radio interview with a man who won SEVERAL jackpots, and he told a story of how he was in a variety store one time and his friend wondered how he could be so lucky. In response this man picked out a scratch ticket, said, “You just do this and this” and won $1600!
    You can spout off all you want about statistical probability and “anyone can win”, but in the end all I see are people who have inherent luck who win these things. If you’re not lucky, there isn’t a damned thing you can do about it.

  21. JollyJumjuck says:

    Oh, and no, I’ve stopped gambling and playing lotteries years ago (it never got so bad that I would be strapped for cash). I realized I’m just not lucky, so I don’t bother.

  22. theczardictates says:

    @timmus: I laughed.

  23. DrJimmy says:

    A similar study produced the same result here in Texas soon after scratch-off lottery tickets went on sale in the early 1990s. A like study in the early 2000s came up with the same result. State Lottery=Poor Tax.

    Texas voters were told up front in 1992 that revenue from the proposed Texas Lottery would go straight to the state general revenue pool. A few years later, TX republicans whipped up voter frenzy about how Lottery revenue was supposed to be spent on exclusively on Education. (It wasn’t, but remember that this particular lie was presented during George W. Bush’s first campaign for TX Governor.)

    If Texans insist on gambling in public, there are better odds at the dog and horse tracks in-state, or at slot machines just across each border east, north, and west.

  24. NotYou007 says:

    Very late to the party on this one but his is how I view lottery tickets.

    I ask people this question.

    When you are going to fly on an airplane would you bet one dollar that the plane is going to crash? They always say no, nobody wants their plane to crash but the odds of the plane crashing are much higher than you ever hitting the lottery.

    You also have a better chance of being hit by lighting than winning the lottery and nobody ever bets a dollar on that one happening either.

    I do get a scratch off ticket maybe twice a year for the fun of it. I’ve won plenty of them in the past. I’m not a big gambler but I do love to play poker but with poker I am the one making the decession. Nobody is forcing me to make a bet or call one, it’s my choice.

    • purplesun says:

      @NotYou007: Yeah, but it’s kinda morbid to ask someone to bet if their plane is going to crash or not. Or if they’re going to be hit by lightning. Sheesh.

      A better question would be… Would you bet $1 that an ice cream truck is about to break down four feet from here and we all get free ice cream and sprinkles because the a/c unit is busted and the driver doesn’t want it to go to waste?

      I’d bet a dollar on that.

  25. Grrrrrrr, now with two buns made of bacon. says:

    For a buck, it’s a cheap thrill and a chance to daydream about what you’d do with a cash windfall. Sure, the odds of winning are much worse than getting hit by lightning or killed in a plane crash, but every year…people DO get hit by lightning and killed in plane crashes.

    My uncle died of a rare form pancreatic cancer..the odds of getting that particular form were much worse than winning the lottery..and yet…he got it anyway, and it killed him, so I figure hey, if it’s that easy to have something bad happen to you with infinitesimally small odds behind it, there’s also a chance of something good happening like winning the lottery.

    I also look at it this way…if I spend $80.00 a week at the grocery store, and $35.00 at the gas pump (among other things), it’s not going to bankrupt me to buy the occasional lottery ticket. I’ll probably never win, but it’s my choice. If I skip a cup of coffee one morning, I can buy TWO tickets!

    What I have seen, which bothers me..is somebody who is already struggling that takes $20 a week away from feeding their family and uses it all to buy scratch tickets.

  26. RChris173 says:

    Carnegie Mellon :D

  27. ModernTenshi04 says:

    I’m reminded of July of last year, the infamous date of 7/7/07. I went into a gas station near where I worked at the time and picked up an energy drink and some Pop-Tarts as I had a late night and had to be up early that Saturday for my job. There was a small group of people who were buying lottery tickets (which I’ve always regarded as a tax on stupidity), and ironically, they were buying the local Pick 3 tickets and all getting the numbers 7 7 7. “Today is a lucky day, and I’m gonna win big with this!” That was the gist of what they all were claiming.

    So I stepped in and explained the probability of them actually winning in the first place, and that buying multiple tickets really didn’t help. For that matter, apparently only so many tickets of a certain selection of numbers can be sold (remember, the lottery works for number selections either straight or boxed), and the cashier had already told some customers they couldn’t get 7 7 7 tickets as too many had already been sold, so some where buying 7 7 6 or some other inane combination. So in addition to my explaining the probability, I told them that with so many tickets having already been sold with that combination of numbers, the prize would be split so much that their winnings would be very marginal in the long run.

    “Yeah, but it’s a lucky number across the board for today’s date, and I’m feeling lucky.”

    I just sighed, shook my head, bought my food and left. I’d like to believe in luck, but I think a lot of it is all in our heads, ourselves tricking our minds into thinking what we’re about to do is a good thing and will pay off in the end. Insanity taking over rationality, really.

    Needless to say, the winning number was not 7 7 7.

  28. HogwartsAlum says:

    @JollyJumjuck:

    Thanks, now I’m depressed.

    ;)