The Distributional Burden of Instant Lottery Ticket Expenditures

Abstract

This article examines the distributional burden of different price-point instant lottery games. Theoretical reasons exist for expecting higher-priced instant lottery games to be less regressive than lower-priced instant games. Using county-level data on sales by price point for six states, the empirical results show that higher-priced instant games are less regressive than lower-priced games. In addition, regressivity is rejected in favor of proportionality for some instant lottery games. The analysis also reveals that counties having a higher-percentage of low-income households have higher sales of lower-priced instant games, but differences in the distribution of household income have no significant impact on higher-priced instant sales. Taken together, the findings suggest that large differences in the distributional burden of individual instant games are masked if aggregated instant-lottery sales data are used.