Title: Measuring the output and prices of the lottery sector
First published: 2008
Description: "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"--National Bureau of Economic Research web site.
LC classification: HB1