It Sucks to be Poor

PITTSBURGH—Although state lotteries, on average, return just 53 cents for every dollar spent on a ticket, people continue to pour money into them — especially low-income people, who spend a larger percentage of their incomes on lottery tickets than do the wealthier segments of society. A new Carnegie Mellon University study sheds light on the reasons why low-income lottery players eagerly invest in a product that provides poor returns.

In the study, published in the July issue of the Journal of Behavioral Decision Making, participants who were made to feel subjectively poor bought nearly twice as many lottery tickets as a comparison group that was made to feel subjectively more affluent. The Carnegie Mellon findings point to poverty’s central role in people’s decisions to buy lottery tickets.

“Some poor people see playing the lottery as their best opportunity for improving their financial situations, albeit wrongly so,” said the study’s lead author Emily Haisley, a doctoral student in the Department of Organizational Behavior and Theory at Carnegie Mellon’s Tepper School of Business. “The hope of getting out of poverty encourages people to continue to buy tickets, even though their chances of stumbling upon a life-changing windfall are nearly impossibly slim and buying lottery tickets in fact exacerbates the very poverty that purchasers are hoping to escape.”

July 24: Carnegie Mellon Study Uncovers Why Low-Income People Buy Lottery Tickets – Carnegie Mellon University.

I don’t mean to be facetious, because this is very important research into what has become an almost violently regressive form of taxation, but in the end what it says is simple: it sucks to be poor. The lottery is particularly sinister, too, because it has often been sold as a way to help the poor through better funding of the public schools. This is another legacy of conservative politics.

The money has only rarely (if ever) used to help schools, of course. I am hoping that in the near future we will look back on this and think: trying to raise tax money through a lottery was both stupid and cruel. My inner cynic is especially skeptical, though, because lotteries have been so well marketed that their image of harmless fun will be difficult if not impossible to change.