PITTSBURGH, July 24 /PRNewswire/ — Although state lotteries, on average, return just 53 cents for every dollar spent on a ticket, people continue to pour money into them — especially low-income people, who spend a larger percentage of their incomes on lottery tickets than do the wealthier segments of society. A new Carnegie Mellon University study sheds light on the reasons why low-income lottery players eagerly invest in a product that provides poor returns.
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In the study, published in the July issue of the Journal of Behavioral Decision Making, participants who were made to feel subjectively poor bought nearly twice as many lottery tickets as a comparison group that was made to feel subjectively more affluent. The Carnegie Mellon findings point to poverty’s central role in people’s decisions to buy lottery tickets.
“Some poor people see playing the lottery as their best opportunity for improving their financial situations, albeit wrongly so,” said the study’s lead author Emily Haisley, a doctoral student in the Department of Organizational Behavior and Theory at Carnegie Mellon’s Tepper School of Business. “The hope of getting out of poverty encourages people to continue to buy tickets, even though their chances of stumbling upon a life-changing windfall are nearly impossibly slim and buying lottery tickets in fact exacerbates the very poverty that purchasers are hoping to escape.”
The researchers influenced participants’ perceptions of their relative wealth — or lack thereof — by having them complete a survey on their opinions of the city of Pittsburgh that included an item on annual income. The group made to feel poor was asked to provide its income on a scale that began at “less than $100,000″ and went upward from there in $100,000 increments, ensuring that most respondents would be in the lowest income category. The group made to feel subjectively wealthier was asked to report income on a scale that began with “less than $10,000″ and increased in $10,000 increments, leading most respondents to be in a middle or upper tier.
Participants, who were recruited at Pittsburgh’s Greyhound Bus terminal, were paid $5 for completing the survey and given the opportunity to buy as many as five scratch-off lottery tickets. The experimental group purchased an average of 1.27 lottery tickets, compared with 0.67 tickets bought by the members of the control group.
A second experiment reported in the paper found that indirectly reminding participants that, while different income groups face unequal outcomes in education, jobs and housing, everyone has equal chances of winning the lottery induced an increase in the number of lottery tickets purchased. The group given this reminder purchased 1.31 tickets, compared with 0.54 for the group not given such a reminder.
In the study, the researchers note that lotteries set off a vicious cycle that not only exploits low-income individuals’ desires to escape poverty but also directly prevents them from improving upon their financial situations. They recommend that state lottery administrators explore strategies that balance the economic burdens faced by low-income households with the need to maintain important funding streams for state governments.
“State lotteries are popular revenue sources that are unlikely to go away anytime soon,” said George Loewenstein, a study co-author and Herbert A. Simon professor of economics and psychology at Carnegie Mellon. “However, it is possible to implement measures that can actually benefit low-income lottery players and lead to fairer outcomes.” Loewenstein noted that one such potential method for addressing income inequality, which has shown promise in other countries, is tying lottery tickets to savings accounts.
Romel Mostafa, a graduate student in Carnegie Mellon’s Department of Social and Decision Sciences, also was a study co-author. The research was funded in part by a grant from the Russell Sage Foundation.
About Carnegie Mellon: Carnegie Mellon is a private research university with a distinctive mix of programs in engineering, computer science, robotics, business, public policy, fine arts and the humanities. More than 10,000 undergraduate and graduate students receive an education characterized by its focus on creating and implementing solutions for real problems, interdisciplinary collaboration, and innovation. A small student-to-faculty ratio provides an opportunity for close interaction between students and professors. While technology is pervasive on its 144-acre Pittsburgh campus, Carnegie Mellon is also distinctive among leading research universities for the world-renowned programs in its College of Fine Arts. A global university, Carnegie Mellon has campuses in Silicon Valley, Calif., and Qatar, and programs in Asia, Australia and Europe. For more, see .

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RICHMOND, Va., May 28 /PRNewswire-USNewswire/ — From a “reading bathtub” in the classroom to painted ceiling tiles to “trips” to faraway places… these are the kinds of characteristics that make a Virginia lottery Super Teacher Award recipient. During the past two weeks, officials with the Virginia Lottery, the Virginia PTA and Virginia-based The Supply Room Companies traveled to public schools in Virginia to present eight K-12 educators with the awards in surprise presentations.
The eight recipients are:
— Tina Bowman, Grange Hall Elementary School in Chesterfield County
— Jennifer Bunn, Indian Valley Elementary School in Floyd County
— Jenny Dean, J. P. Burley Middle School in Albemarle County
— Martha Kelly, Mount Pleasant Elementary School in Roanoke County
— Aretha Livingston, Tucker-Capps Elementary School in Hampton
— Carole Marable, Clover Hill Elementary School in Chesterfield County
— Michael Perry, Keister Elementary School in Harrisonburg
— Hanna Tomhave, Mantua Elementary School in Fairfax County

Click here to meet each recipient in a special video presentation and read the nominating essay:
The recipients were selected from more than 1,800 nominations submitted by the public. Each award consists of a cash prize of $2,000 for the teacher and an additional $2,000 classroom credit from The Supply Room Companies. Each winner represents one of the Lottery’s eight geographic regions of the state.
The winners were selected by a panel of distinguished educators and community leaders, including:
— Melissa Nehrbass, President of the Virginia PTA
— James W. Dyke, Former Secretary of Education for Virginia
— Hon. Flora Crittenden, Virginia House of Delegates, Ret
— Hon. Thomas M. Jackson, Jr., Virginia House of Delegates, Ret
— Richard E. Williams, Jr., Deputy Director of the Virginia Lottery

The judges selected the eight winners based on the strength of the nominations, each of which included a short essay, showing teachers with passion and commitment to the teaching profession, innovation and creativity in the classroom and parental involvement. In addition, three non-winning teachers from around the state will win $500 Visa gift cards in a second-chance drawing held on May 27, 2008.
“As a former teacher, I have such great respect for educators who use their talents to fire the imaginations of students,” said Virginia lottery Executive Director Paula Otto. “It was an honor to surprise each of the eight teachers with Super Teacher Awards, along with our partners at the Virginia PTA and The Supply Room Companies.”
Since 1999, all Virginia lottery profits have been designated solely to K-12 public school education in the Commonwealth. In that time, the lottery has turned over more than $3.4 billion for Virginia’s public schools, currently representing about 7 percent of annual state funding for public education in Virginia. In 19 years, the lottery has awarded more than $10 billion in prizes to players and more than $1 billion in retailer commissions.
Virginia Lottery