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> the poor who are least well equipped to understand Is there some actual evidence that poor people are under the impression that they have a meaningful chance

by dpark 5mo ago

> the poor who are least well equipped to understand Is there some actual evidence that poor people are under the impression that they have a meaningful chance of winning significant money the lottery? I see this line a lot and it’s extremely patronizing. I’m not even pro lottery but this “poor people are too dumb to understand” does not strike me as a sound argument.

SoftTalker 5mo ago
Not too dumb, but badly educated about money (part of why they stay poor) and probabilities.
- dpark 5mo ago
  Poor people stay poor because it’s really hard to climb out of poverty. It’s a function of opportunity, culture, society, and a lot more stuff. Education is a factor but I am doubtful it’s the primary one, and even where it is a major factor, it’s probably more general education than specifically about money. I feel like the “poor people don’t understand money” line of thought comes from the same people who insist that avocado toast and lattes are why millennials can’t afford housing.
  - gottorf 5mo ago
    > it’s really hard to climb out of poverty. It’s a function of opportunity, culture, society, and a lot more stuff I agree with you, but perhaps from the other direction. I think American society in particular gives an amazing amount of opportunity for people to climb out of poverty, or at least we used to, before we started "replacing what works with what sounded good". But we still do, for the most part. Most of the cultural and social factors that prevent someone from lifting themselves up are self-imposed by those individual cultures and societies, and as of late, it's become verboten to call them out on it. There exist subgroups in this country where you'd indeed have to be a truly remarkable individual to claw yourself out of it into wealth. However, it doesn't have to be that way; that's a choice society made, on what grounds exactly I'm not sure, but the choice was made nevertheless.
    - dpark 5mo ago
      > I think American society in particular gives an amazing amount of opportunity for people to climb out of poverty, or at least we used to I agree that we are better than many places for this, but also much worse than we could be. > Most of the cultural and social factors that prevent someone from lifting themselves up are self-imposed by those individual cultures and societies I agree with this. There are huge social and cultural aspects of poverty.
gottorf 5mo ago
It's more that poor people have worse impulse control and higher time preference[0], which contribute to the behavioral outcome of spending money on lottery tickets despite the EV being negative. [0]: If we're splitting hairs, we should specify that having poor impulse control and higher time preference are the base causational factors that make it more likely for someone to be poor, buy lottery tickets, engage in criminality, etc. etc.
- dpark 5mo ago
  Sorry, is there evidence for this? I don’t have any trouble believing that there is some slice of poor people that this is true about. But I kind of doubt that holds in general.
  - gottorf 5mo ago
    Are we disagreeing about the definition of "poor people"? I'm not sure why someone would find it so hard to believe that the poor, especially the long-term poor, have character traits that are not conducive to lifting themselves out of poverty. On that same vein, there is no particular evidence needed to convince someone that people who share the characteristics with me of not being very tall or particularly athletic have a terribly poor chance of making it in the NBA. But here is one study[0] which found, interestingly, that although a higher time preference (that is, preferring the present over the future) is correlated as expected with wealth, it is not significantly correlated with current income. Put another way: in the modern world where opportunities are varied, anyone, even people with poor impulse control and high time preference, could earn high incomes, but you only become wealthy (i.e. escape poverty) over time through putting aside some of that income to save and invest. Back to the American setting, "heavy hitters" of the lottery spend about $2500/yr[1]. If you instead put $200/mo into the S&P 500 over ten years, you'd be sitting on over $55k. Time under the curve matters greatly. The same personality traits that make someone prefer buying scratchers instead of investing for their future are the ones that keep them poor. I would have thought this to be self-evident. [0]: https://pmc.ncbi.nlm.nih.gov/articles/PMC7392281/ https://pmc.ncbi.nlm.nih.gov/articles/PMC7392281/ [1]: https://elmwealth.com/lottery-fallacy/ https://elmwealth.com/lottery-fallacy/
dfxm12 5mo ago
This article looks at lotto sales. I understand it doesn't address the assertions brought up about why people buy tickets, but maybe it still interesting in the context of this conversation. https://archive.is/kY7U6 https://archive.is/kY7U6
- dpark 5mo ago
  For sure, lottery revenues are disproportionately drawn from the poorest.

by dpark 5mo ago

SoftTalker 5mo ago

Not too dumb, but badly educated about money (part of why they stay poor) and probabilities.

dpark 5mo ago
Poor people stay poor because it’s really hard to climb out of poverty. It’s a function of opportunity, culture, society, and a lot more stuff. Education is a factor but I am doubtful it’s the primary one, and even where it is a major factor, it’s probably more general education than specifically about money. I feel like the “poor people don’t understand money” line of thought comes from the same people who insist that avocado toast and lattes are why millennials can’t afford housing.
- gottorf 5mo ago
  > it’s really hard to climb out of poverty. It’s a function of opportunity, culture, society, and a lot more stuff I agree with you, but perhaps from the other direction. I think American society in particular gives an amazing amount of opportunity for people to climb out of poverty, or at least we used to, before we started "replacing what works with what sounded good". But we still do, for the most part. Most of the cultural and social factors that prevent someone from lifting themselves up are self-imposed by those individual cultures and societies, and as of late, it's become verboten to call them out on it. There exist subgroups in this country where you'd indeed have to be a truly remarkable individual to claw yourself out of it into wealth. However, it doesn't have to be that way; that's a choice society made, on what grounds exactly I'm not sure, but the choice was made nevertheless.
  - dpark 5mo ago
    > I think American society in particular gives an amazing amount of opportunity for people to climb out of poverty, or at least we used to I agree that we are better than many places for this, but also much worse than we could be. > Most of the cultural and social factors that prevent someone from lifting themselves up are self-imposed by those individual cultures and societies I agree with this. There are huge social and cultural aspects of poverty.

gottorf 5mo ago

It's more that poor people have worse impulse control and higher time preference[0], which contribute to the behavioral outcome of spending money on lottery tickets despite the EV being negative. [0]: If we're splitting hairs, we should specify that having poor impulse control and higher time preference are the base causational factors that make it more likely for someone to be poor, buy lottery tickets, engage in criminality, etc. etc.

dpark 5mo ago
Sorry, is there evidence for this? I don’t have any trouble believing that there is some slice of poor people that this is true about. But I kind of doubt that holds in general.
- gottorf 5mo ago
  Are we disagreeing about the definition of "poor people"? I'm not sure why someone would find it so hard to believe that the poor, especially the long-term poor, have character traits that are not conducive to lifting themselves out of poverty. On that same vein, there is no particular evidence needed to convince someone that people who share the characteristics with me of not being very tall or particularly athletic have a terribly poor chance of making it in the NBA. But here is one study[0] which found, interestingly, that although a higher time preference (that is, preferring the present over the future) is correlated as expected with wealth, it is not significantly correlated with current income. Put another way: in the modern world where opportunities are varied, anyone, even people with poor impulse control and high time preference, could earn high incomes, but you only become wealthy (i.e. escape poverty) over time through putting aside some of that income to save and invest. Back to the American setting, "heavy hitters" of the lottery spend about $2500/yr[1]. If you instead put $200/mo into the S&P 500 over ten years, you'd be sitting on over $55k. Time under the curve matters greatly. The same personality traits that make someone prefer buying scratchers instead of investing for their future are the ones that keep them poor. I would have thought this to be self-evident. [0]: https://pmc.ncbi.nlm.nih.gov/articles/PMC7392281/ https://pmc.ncbi.nlm.nih.gov/articles/PMC7392281/ [1]: https://elmwealth.com/lottery-fallacy/ https://elmwealth.com/lottery-fallacy/

dfxm12 5mo ago

This article looks at lotto sales. I understand it doesn't address the assertions brought up about why people buy tickets, but maybe it still interesting in the context of this conversation. https://archive.is/kY7U6 https://archive.is/kY7U6

dpark 5mo ago
For sure, lottery revenues are disproportionately drawn from the poorest.