Why do people buy lottery tickets?
Florence Wang ’21 set out to answer this seemingly simple question in her independent project for the Center for Statistics and Machine Learning’s (CSML) certificate program. Looking at this question deeply, she arrived at some intriguing results that could be used to formulate socioeconomic policies on lotteries, which is seen by some critics as a regressive tax on the poor. Her project garnered the poster award at CSML’s annual poster session, along with the project of John Olaf Hallman ’20.
“I first became interested in this topic because I noticed I would disproportionately see people from lower economic backgrounds, such as blue-collar and immigrant workers, buying lottery tickets,” said Wang, a Princeton School of Public and International Affairs student. “This was true both in Hong Kong - where I am from - as well as in the US. For example, I’d often see immigrant workers lining up to buy lottery tickets at the kiosk on Nassau Street, but I never saw anyone else buying them. I wanted to understand why.”
Wang said studies have shown that there is “a strong inverse relationship between socioeconomic status and lottery play” and “poor and uneducated people are the most avid buyers.” Despite this, lotteries are state-run enterprises in America and serve as an important revenue stream for many local governments. People have called this an unethical source of money because it’s basically a punitive tax on society’s most vulnerable people, Wang said.
“Logically, you might think that people with less disposable income would not gamble as much,” she said. “But that’s not the case. Researchers have even found that spending on the lottery tend to go up during times of recession, which is something I didn’t expect.”
Examining the motivations that drive people to play the lottery could uncover some hidden insights and suggest policies to mitigate the regressive taxation effects of state lotteries, she said.
“Why are we seeing this kind of phenomenon? I wanted to answer this question quantitatively using statistical methods,” she said. “There isn’t much existing research on this topic, especially within the US. And most existing research either looks at it from the perspective of cognitive psychology – the idea that these people have a cognitive bias towards gambling, or they are ethnographic studies – long interviews with a small sample of people.”
Wang utilized multivariate logistic regressions to explore three prominent sociological theories on lottery play. She used data from the National Longitudinal Study of Adolescent to Adult Health, a nationally-representative sample of US young adults. Her results revealed some surprising insights.
“My findings show that years of schooling is highly correlated with lottery play, but income – another common measure of SES (socioeconomic status) – is not,” she said, explaining that the less schooling a person has, the more people have a tendency to play the lotto.
Other findings: People who are more spiritual tend not to play the lotto. And that people who do play the lottery do it as a form of tension management. All of these results suggest possible policy remedies: increasing the availability of training programs and vocational schooling on top of K-12 education plus more opportunities at the community level to manage tensions and the daily stresses of life as well as more outlets for spiritual practice.
Wang said she enjoyed conducting her research project and attending her CSML classes. She became interested in pursuing the CSML certificate after taking a class on quantitative social science for her major.
“It’s important to combine quantitative and qualitative analyses to understand social issues more deeply.” she said. “I was initially a little intimidated in pursuing this certificate because I don’t have much of a quantitative background. But there are so many options in the department that you can create a path catered to your skills and interests. In our increasingly data-driven world, it’s important to have a good grasp of numbers and not shy away from data, and taking CSML courses has really helped me with my confidence in that regard.”
After graduation, Wang said she is interested in going to law school or delving into the start-up world. Wang has worked as a summer intern at Sequoia Capital China, a venture capital firm. She is currently an intern at BCG Digital Ventures, a corporate investment and incubation firm focused on start-ups.
But first, she must complete her upcoming senior year. Wang, who is also pursuing a certificate in East Asian studies, is interested in studying Chinese politics and civil society for her senior thesis. Like her CSML independent project, she wants to add a data science approach to her research.
“I’m a big advocate of getting more social science majors involved with CSML,” she said. “Hopefully my experience can show that you don’t need a highly quantitative background to do well in the program.”