Measuring the Output and Prices of the Lottery Sector: An Application of Implicit Expected Utility Theory / Kam Yu.

Format:

Book

Author/Creator:

Yu, Kam.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14020.

NBER working paper series no. w14020

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Measuring the Output and Prices of the Lottery Sector

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

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.

Notes:

Print version record

May 2008.