The Public Good and the Lottery

Lottery is a form of gambling in which prizes are awarded by chance. The practice can be traced to ancient times: the Old Testament instructed Moses to take a census of Israel and divide land by lot; and Roman emperors used lotteries to give away property and slaves at Saturnalian feasts. Modern state lotteries are designed to maximize revenues by selling tickets to the general public. But critics argue that they operate at cross-purposes to the general public good: they promote gambling, lead to compulsive gamblers, and cause lower-income people to lose disproportionately.

Despite these criticisms, lottery advocates argue that their product is different from other forms of gambling because people purchase the tickets voluntarily and for a specific purpose, and that the proceeds can help with important social goals. They also claim that state-sponsored lotteries are a safe source of revenue because the state is not taxing the public directly. In addition, lotteries are popular in times of economic stress because they allow people to spend their money on a “painless” basis.

A number of factors contribute to the popularity of state lotteries, but one important factor is that the proceeds are earmarked for specific purposes, such as education. This strategy is effective in generating broad public support, especially when states are facing budget deficits. But, as Clotfelter and Cook find, the popularity of state lotteries is independent of a state’s objective fiscal circumstances; it is also influenced by the degree to which lottery proceeds are perceived to benefit a particular public good.