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I would like to see a portion of lottery ticket purchases end up in an individuals retirement/savings account, locked away for some pre-determined period of tim

I would like to see a portion of lottery ticket purchases end up in an individuals retirement/savings account, locked away for some pre-determined period of time, transferable on death to relatives, interest split between the state and the individual. It's a shallow proposal, but seems like a nice idea, anyway.

borism 16y ago
if those are state-owned lotteries, then some profits do end-up as pensions anyway trough state-funded pensions.
nostrademons 16y ago
I don't think that'd fulfill the purpose of buying a lottery ticket, though. I look at it in terms of different marginal utility functions of money. A dollar a day isn't going to take you from poor to rich. Over a year, that's $365. Over a working life of 50 years, that's slightly under $20k. $20K in a retirement account isn't going to last you very long or buy you very much. $50M, however, is a very different experience. You're rich; you don't have to work. You don't have to look at the price tags on items. You can buy all the things you dreamed of before. Lottery players are completely rational, they just don't think in terms of numbers. They think in terms of "I can go from poor to poor, or I can have a chance of going from poor to rich." There's a qualitative difference between having $50 in the bank and $50M in the bank. There is not really a qualitative difference between having an income of $13,000/year and having an income of $12,635/year.
- cynicalkane 16y ago
  That's why I consider the lottery not a "math tax" but an "economics tax". Your reasoning seems reasonable to someone that doesn't think about it too hard. But if a $1 lottery ticket gives you, say, a 1/10,000,000 chance to win $2.5 million... well, you need having $2.5 million to be ten million times better than having one dollar to make it a good bet. I have no idea why anyone would consider this a rational decision, but gamblers do not typically gamble because they are rational. There's also the effects of decreasing marginal utility, and the problems that someone poor with personal finance will have when faced with a lottery jackpot. I don't need to get into those to support my argument, but those effects are pretty big.
  - sosuke 16y ago
    I'd say that any player of these lotteries would say, without hesitation, that $2.5 million dollars in the bank is ten million times better or more than $1 dollar in the bank. You aren't really playing with numbers when you play the lottery, there is a lot more going on in the mind of the player than the odds.
    - cynicalkane 16y ago
      You're right, but my point is that it's not rational to act against your interests, even if you think you're acting for them. Thinking it's worth it to play the lottery is almost certainly irrational except for individuals with a very strange utility curve...
      - nostrademons 16y ago
        The utility curve doesn't have to be all that strange - it just has to be a step function, where $1 yields no additional increase in utility yet $2.5M yields an additional increase. There is pretty significant evidence that people's utility functions are in fact step functions - how many folks will just dump change into a tipjar, or refrain from picking up coins on the sidewalk?

borism 16y ago

if those are state-owned lotteries, then some profits do end-up as pensions anyway trough state-funded pensions.

nostrademons 16y ago

I don't think that'd fulfill the purpose of buying a lottery ticket, though. I look at it in terms of different marginal utility functions of money. A dollar a day isn't going to take you from poor to rich. Over a year, that's $365. Over a working life of 50 years, that's slightly under $20k. $20K in a retirement account isn't going to last you very long or buy you very much. $50M, however, is a very different experience. You're rich; you don't have to work. You don't have to look at the price tags on items. You can buy all the things you dreamed of before. Lottery players are completely rational, they just don't think in terms of numbers. They think in terms of "I can go from poor to poor, or I can have a chance of going from poor to rich." There's a qualitative difference between having $50 in the bank and $50M in the bank. There is not really a qualitative difference between having an income of $13,000/year and having an income of $12,635/year.

cynicalkane 16y ago
That's why I consider the lottery not a "math tax" but an "economics tax". Your reasoning seems reasonable to someone that doesn't think about it too hard. But if a $1 lottery ticket gives you, say, a 1/10,000,000 chance to win $2.5 million... well, you need having $2.5 million to be ten million times better than having one dollar to make it a good bet. I have no idea why anyone would consider this a rational decision, but gamblers do not typically gamble because they are rational. There's also the effects of decreasing marginal utility, and the problems that someone poor with personal finance will have when faced with a lottery jackpot. I don't need to get into those to support my argument, but those effects are pretty big.
- sosuke 16y ago
  I'd say that any player of these lotteries would say, without hesitation, that $2.5 million dollars in the bank is ten million times better or more than $1 dollar in the bank. You aren't really playing with numbers when you play the lottery, there is a lot more going on in the mind of the player than the odds.
  - cynicalkane 16y ago
    You're right, but my point is that it's not rational to act against your interests, even if you think you're acting for them. Thinking it's worth it to play the lottery is almost certainly irrational except for individuals with a very strange utility curve...
    - nostrademons 16y ago
      The utility curve doesn't have to be all that strange - it just has to be a step function, where $1 yields no additional increase in utility yet $2.5M yields an additional increase. There is pretty significant evidence that people's utility functions are in fact step functions - how many folks will just dump change into a tipjar, or refrain from picking up coins on the sidewalk?