What makes people -- particularly poor people -- play the a lottery when the odds of winning are so low?
At Wired Jonah Lehrer has an interesting post delving into the psychology of lottery-players. Lehrer notes that lottery has become a deeply regressive tax because the majority of lottery players are poor, and the majority of the money spent on lottery tickets goes to the state. Alicia Hansen, at the Institute for Public Accuracy explains:
If a person who makes $15,000 a year purchases $3,000 worth of lottery tickets, she will spend 20 percent of her income on the lottery--quite a large portion (about one-third of that amount will be in the form of implicit lottery taxes). However, if an individual who earns $1,500,000 a year spends the same amount, it will be a drop in the bucket--a mere .2 percent of her income. Taking into account only the dollar amount spent misses the point.
Our current federal income tax is progressive, meaning rates rise as income rises--the opposite of regressive. Many experts have argued for a flat tax, with one rate for all, but virtually no one would argue for a regressive income tax, where rates rise as income falls; such a tax would be seen as unfair and unduly burdensome to the poor.
Lehrer highlights a paper from 2008 which seeks to explain why the poor buy lottery tickets, even though it's against their financial interests. "The problem, it turns out, is feeling poor." Lehrer points to a particularly poignant bit from the study:
In two experiments conducted with low-income participants, we examine how implicit comparisons with other income classes increase low-income individuals' desire to play the lottery. In Experiment 1, participants were more likely to purchase lottery tickets when they were primed to perceive that their own income was low relative to an implicit standard. In Experiment 2, participants purchased more tickets when they considered situations in which rich people or poor people receive advantages, implicitly highlighting the fact that everyone has an equal chance of winning the lottery.
Last year, the North American lottery system generated more than $70 billion -- more than Americans spent on music and movie tickets combined.