The Income Redistribution Effects of Texas State Lottery Games

Abstract

This study examines the regressivity of three lottery games in the state of Texas using data from 195 of the state’s 254 counties. The income distribution effects are examined using Suits indices and multiple-regression analyses. The findings, by each technique, show that all three lottery games are regressive and that the most regressive of the games are the instant games, the games with the smallest but most immediate payoffs. The findings of the multiple-regression analyses indicate that the instant games are the only ones that show a significantly positive relationship between the size of the minority population and purchases. Furthermore, the results show that the instant games are the only games in which a significantly negative relationship was found between the percentage of college graduates and purchases. Finally, all games were found to be complementary to all other goods.