Are Consumers More Willing to Invest in Luck During Recessions?

Does Economic Policy Uncertainty Encourage Gambling? Evidence from the Chinese Welfare Lottery Market

“…3 During the waiting period between the purchase of a ticket and the draw of the winning numbers, people enjoy positive anticipatory emotions (Kocher et al, 2014;Loewenstein, 1987;Wu, 1999). These theoretical considerations are supported by the empirical finding that lottery sales rise during adverse situations like recessions and disasters (Capacci et al, 2017;Horváth and Paap, 2012;Li et al, 2011;Mikesell, 1994;Olason et al, 2015).…”

“…Similarly, Horváth and Paap (2012) find that lottery sales in the U.S. grow a lot during recessions and are not affected by temporary income shocks. Capacci et al (2017) use data from Italy and conclude that gambling expenditures increase as overall economic conditions worsen, implying that there is a higher tendency for people to resort to gambling during recessions. This relationship is confirmed in the case of Iceland by Olason et al (2015) who report that gambling participation increased during the Icelandic economic recession starting in 2008.…”

“…First, our empirical evidence contributes to the literature on the determinants of people's gambling behavior in China. Prior studies have examined the determinants of gambling behavior in advanced countries where in most cases lotteries are one of many forms of gambling (Capacci et al, 2017;Horváth and Paap, 2012;Mikesell, 1994). Yet, the literature on gambling behavior in emerging countries is scant.…”

The macroeconomic determinants and consequences of household financial behavior

“…3 During the waiting period between the purchase of a ticket and the draw of the winning numbers, people enjoy positive anticipatory emotions (Kocher et al, 2014;Loewenstein, 1987;Wu, 1999). These theoretical considerations are supported by the empirical finding that lottery sales rise during adverse situations like recessions and disasters (Capacci et al, 2017;Horváth & Paap, 2012;Li et al, 2011;Mikesell, 1994;Olason et al, 2015).…”

“…This chapter sheds light on the determinants of gambling behavior in China, which is an under-researched area in the literature. Prior studies on gambling behavior have largely focused on advanced economies where lotteries are just one form of gambling (Capacci et al, 2017;Horváth & Paap, 2012;Mikesell, 1994). However, given that lotteries are the only legal form of gambling in China, our study provides novel insights into the determinants of gambling behavior in an emerging economy.…”