An Examination of Two Competing Hypotheses: For the Demand for Lottery Tickets

Abstract

We extend previous research on higher sales for end-of-the-week lottery drawings to a longer time series and to different lotteries.  We find higher sales for end-of-the-week lotteries drawings with Wednesday/Saturday drawings and Tuesday/Friday drawings.  Additionally, higher Friday sales from daily lotteries along with results from bonus play opportunities and intraday lottery sales provide evidence suggesting that the leisure time hypothesis is an incomplete explanation for the observed phenomenon.  We offer an alternate explanation related to the preferred habitat for liquidity and suggest that an individual’s pool of discretionary funds is largest immediately following pay days. It is the fact that the most common pay pattern is weekly or biweekly with payment on Fridays which likely results in higher sales for end-of-the-week lottery drawings.