Measuring the Output and Prices of the Lottery Sector: An Application of Implicit Expected Utility Theory

Kam Yu

NBER Working Paper No. 14020
Issued in May 2008
NBER Program(s):   PR

---- Abstract -----

Using implicit expected utility theory, a money metric of utility derived from playing a lottery game is developed. Output of the lottery sector can be defined as the difference in utility with and without the game. Using a kinked parametric functional form, outputs of the Canadian Lotto 6/49 are estimated. Results show that this direct economic approach yield an average output which is almost three times of the official GDP, which takes total factor costs as output. A by-product of the estimation is an implicit price index for lottery, which can serve as a cost-of-living index for the CPI. The estimated price elasticity of demand -0.67 closely resembles results for the U.K. and Israel in previous studies.

Would you like an annual subscription to NBER Working Papers? Click here for more information.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.
Information for subscribers and others expecting no-cost downloads

Machine-readable bibliographic record - MARC, RIS, BibTeX

 

 
Publications:
Main Publications Page
 
New This Week
Working Papers
Books              
Books in Progress
Older Books Online
Digest            
Reporter            
Bulletin on Aging & Health
Historical Bulletins
Free Subscriptions
Paid Subscriptions
 
Research:
Program descriptions and members
 
Working Group Descriptions and Papers
 
Selected Projects:
Conference on Research in Income and Wealth
Conference on Econometrics and Mathematical Economics
Sloan Science and Engineering Workforce Project
Boston Census Research Data Center
 
Call for Papers
Submit to WP Series             
 
Data:
NBER Collection
Business Cycle Dates
Latest Business Cycle Memo
New Economic Releases
Selected Sources
Current Population Survey
Economic Organizations
US Government Agencies
Other Data Collections

Economic Report of the President
Economic Indicators
Congressional Budget Office
OECD Frequently Requested Statistics
 
About
What is the NBER?
NBER Historical Archives
Non-data Links    
Search              
Help              
Contact us
Site Map
Employment              
Fellowships
 
People:
Staff
Researchers
Board
Contact Us
Search
 
Search via Google: