A penny here, a penny there: Everyone likes lottery tickets; they make great stocking stuffers, right? Exactly. Everyone likes the small thrill of taking a chance at winning big. But some people—by and large, lower-income people—take this thrill more often than the more affluent, spending more money (and greater proportions of their own income) on the lottery. In Massachusetts, this trend plays out linearly as you move down the income scale across communities: according to a Federal Reserve Bank of Boston memo, "each $10,000 decrease in median household income for a Publice Use Microdata Areas corresponds, on average, to a 0.4 percentage point increase in the share of total area income spent on lotteries.“ As many state lotteries contribute significant sums to state coffers, the lottery’s "taxing” of the poor could even be seen as a vital policy issue. Why do lower-income folks buy more lotto tickets than their richer counterparts? Incentives play a role, certainly, but cultural norms do as well. Middle class people gamble; yet when it comes to the lottery, they sense a certain stigma.
Attribution: Erik Michaels-Ober
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