CNBC just ran a brief segment on unconventional economic indicators. Their viewers wrote in with contradictory views about sales of lottery tickets. One claimed that he think increased ticket sales are linked to a rising economy, the other that increased sales indicate a slowing economy.
So who is right?
The latest data we came up with show that sales rose during the recession. More than half of all states with lotteries have reported rising sales for the second half of 2008. Researchers suggest that financial insecurity drives people to risk more of their money than usual on lottery tickets, although exactly why isn’t clear.
- People may feel that economic crises demonstrate that they are more vulnerable to unexpected downside surprises and try to compensate by opening themselves up to gains from unlikely upside surprises.
- It may just be that they feel the opportunities to make lots of money through hard work have diminished, leaving the lottery as the only path to riches.
- Or perhaps it’s just a cheap form of entertainment.
Anyway, we those of you scratching you heads after watching the CNBC segment might want a real answer rather than just random guesses by the hosts.