Arbeitspapier
Do consumers gamble to convexify?
The combination of credit constraints and indivisible consumption goods may induce some riskaverse individuals to play lotteries to have a chance of crossing a purchasing threshold. One implication of this is that income effects for individuals who choose to play lotteries are likely to be larger than for the general population. Using UK data on lottery wins, other windfalls and durable good purchases, we show that lottery players display higher income effects than non-players but only amongst those likely to be credit constrained. This is consistent with credit constrained, risk-averse agents gambling to convexify their budget set.
- Language
-
Englisch
- Bibliographic citation
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Series: IFS Working Papers ; No. 11,07
- Classification
-
Wirtschaft
Consumer Economics: Empirical Analysis
Macroeconomics: Consumption; Saving; Wealth
Criteria for Decision-Making under Risk and Uncertainty
Sports; Gambling; Restaurants; Recreation; Tourism
- Subject
-
Gambling
Lotteries
Consumption
Durables
- Event
-
Geistige Schöpfung
- (who)
-
Crossley, Thomas F.
Low, Hamish
Smith, Sarah
- Event
-
Veröffentlichung
- (who)
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Institute for Fiscal Studies (IFS)
- (where)
-
London
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Crossley, Thomas F.
- Low, Hamish
- Smith, Sarah
- Institute for Fiscal Studies (IFS)
Time of origin
- 2011
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