Gambling at Lucky Stores: Empirical Evidence from State Lottery Sales

Authors: Guryan, Jonathan; Kearney, Melissa S.

Source: The American Economic Review, Volume 98, Number 1, March 2008 , pp. 458-473(16)

Publisher: American Economic Association

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Abstract:

We show that the week after selling a large-prize Texas Lotto winning ticket, a retailer experiences a 12 to 38 percent relative increase in ticket sales. Some increase persists for up to 40 weeks. We document that the sales response increases with jackpot size and is larger in areas with more economically disadvantaged populations. Sales patterns across games and across retailers are not consistent with most advertising explanations. Furthermore, response patterns are not consistent with representativeness-based explanations for the hot hand or gambler's fallacy; we suggest an alternative explanation for the observed "lucky store" effect.

Document Type: Short communication

DOI: http://dx.doi.org/10.1257/aer.98.1.458

Publication date: 2008-03-01

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The American Economic Review is a general-interest economics journal. The journal is published quarterly and contains articles on a broad range of topics. Established in 1911, the AER is among the nation's oldest and most respected scholarly journals in the economics profession.
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