The Relative Regressivity of Seven Lottery Games

Kathryn L. Combs, University of St. Thomas, Minnesota
Jaebeom Kim, Oklahoma State University
John A. Spry, University of St. Thomas, Minnesota

Document Type Article

Online Publication Date: 01 January 2008 To cite this Article: Combs, Kathryn L., Kim, Jaebeom and Spry, John A. (2008) 'The relative regressivity of seven lottery games', Applied Economics, 40:1, 35 - 39 To link to this article: DOI: 10.1080/13504850701439327 URL: http://dx.doi.org/10.1080/13504850701439327

Abstract

We study the implicit tax incidence of raising state revenue through a monopoly state-run lottery using a new dataset on individual Minnesota lottery game sales by zip code. We use the bootstrap to compute SEs and construct confidence intervals for Suits Indices of seven lottery products. We conclude that the implicit tax on each product is regressive, and find statistically significant differences in regressivity between some products. Minnesota’s newly introduced G3 instant scratch product, printed at time and place of purchase, is also the most regressive lottery game.