State Lotteries and Agency Costs: Hidden Costs to Nonparticipants

A bstract .   Some nonparticipants support lotteries because they expect the lottery will shift a portion of their tax burden to participants. The principal-agent model suggests that lotteries will result in an above normal increase in state expenditures. This paper finds that 77 percent of net lottery proceeds are utilized for above normal spending increases, suggesting that tax benefits to nonparticipants are greatly diminished.     

State Lotteries, Isolation and Economic Growth in the U.S.

This paper uses a Granger causality test adapted for use with cross-section time series data, to (1) test the relationship between lottery revenue and state economic growth (per capita income), and (2) address the importance of cross-border purchases in the relationship. Neither issue has been empirically tested previously. Previous evidence (Caudill, et al., 1995) suggests that states surrounded by lotteries are more likely than isolated states to introduce lotteries. But the empirical results here suggest that lotteries do not contribute to economic growth unless the state is isolated from other state lotteries. The importance of isolation suggests that cross-border purchases (exports) of lottery tickets have a significant impact on the effectiveness of lotteries as fiscal policies, and that "defensive" lotteries (those introduced to keep citizens from buying tickets from neighboring states) are ineffective.     

Copycat gaming: A spatial analysis of state lottery structure

In models of tax competition, tax instruments are explicit; all parties are aware of the tax and respond to incentives provided therein. In the case of state lotteries, the tax is the amount of sales collected but not redistributed as prizes. Using data from 1967 to 2000, we show that although such a tax is implicit, states still engage in tax competition; if neighboring states raise their prize payout by 10% (thereby lowering their lottery tax), the home state will respond with up to a 5% increase in their prize payout.     

On the nature of certainty equivalent functionals

We explore connections between the certainty equivalent return (CER) functional and the underlying utility function. Curvature properties of the functional depend upon how utility function attributes relate to hyperbolic absolute risk aversion (HARA) type utility functions. If the CER functional is concave, i.e., if risk tolerance is concave in wealth, then preferences are standard. The CER functional is linear in lotteries if utility is HARA and lottery payoffs are on a line in state space. Implications for the optimality of portfolio diversification are given. When utility is concave and non-increasing relative risk averse, then the CER functional is superadditive in lotteries. Depending upon the nature of association among lottery payoffs, CERs for constant absolute risk averse utility functions may be subadditive or superadditive in lotteries. Our approach lends itself to straightforward experiments to elicit higher order attributes on risk preferences.     

On the nature of certainty equivalent functionals

We explore connections between the certainty equivalent return (CER) functional and the underlying utility function. Curvature properties of the functional depend upon how utility function attributes relate to hyperbolic absolute risk aversion (HARA) type utility functions. If the CER functional is concave, i.e., if risk tolerance is concave in wealth, then preferences are standard. The CER functional is linear in lotteries if utility is HARA and lottery payoffs are on a line in state space. Implications for the optimality of portfolio diversification are given. When utility is concave and non-increasing relative risk averse, then the CER functional is superadditive in lotteries. Depending upon the nature of association among lottery payoffs, CERs for constant absolute risk averse utility functions may be subadditive or superadditive in lotteries. Our approach lends itself to straightforward experiments to elicit higher order attributes on risk preferences.     

“Reverse” nested lottery contests

This paper proposes a multi-prize “reverse” nested lottery contest model, which can be viewed as the “mirror image” of the conventional nested lottery contest of  Clark and Riis (1996a). The reverse-lottery contest model determines winners by selecting losers based on contestants’ one-shot effort through a hypothetical sequence of lotteries. We provide a microfoundation for the reverse-lottery contest from a perspective of (simultaneous) noisy performance ranking and establish that the model is underpinned by a unique performance evaluation rule. We further demonstrate that the noisy-ranking model can be interpreted intuitively as a “worst-shot” contest, in which contestants’ performances are evaluated based on their most severe mistakes. The reverse-lottery contest model thus depicts a great variety of widely observed competitive activities of this nature. A handy closed-form solution for a symmetric equilibrium of the reverse-lottery contest is obtained. We show that the winner-take-all principle continues to hold in reverse-lottery contests. Moreover, we find that a reverse-lottery contest elicits more effort than a conventional lottery contest whenever the prizes available to contestants are relatively scarce.     

地域文化对体育彩票销售影响的探讨——以安康市体育彩票销售为例

影响体育彩票销售的因素有很多,尤其是地方经济水平、宣传力度、博彩方式等。而地域文化对体育彩票的销售也有着不可低估的影响。文章以安康市体育彩票销售在陕西省各地(市)中所表现出的差异性为例,采用调研咨询法、文献资料法、数理统计法探讨了安康地域文化及其对体育彩票销售的影响,并针对安康地域文化特点提出了提升安康体育彩票销售的建议。     

Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence

Abstract.  This paper studies the links between macroeconomic adjustment and poverty. The first part summarizes some of the recent evidence on poverty in the developing world. The second reviews the various channels through which macroeconomic policies affect the poor, whereas the third is devoted to the specific role of the labor market. It presents an analytical framework that captures some of the main features of the urban labor market in developing countries and studies the effects of fiscal adjustment on wages, employment, and poverty. The fourth part presents cross‐country regressions linking various macroeconomic and structural variables to poverty. Higher levels and growth rates of per capita income, higher rates of real exchange rate depreciation, better health conditions, and a greater degree of commercial openness lower poverty, whereas inflation, greater income inequality, and macroeconomic volatility tend to increase it. Moreover, the impact of growth on poverty appears to be asymmetric; it seems to result from a significant relationship between episodes of increasing poverty and negative growth rates.     

The rise (or fall) of lottery adoption within the logic of collective action: Some empirical evidence

This paper builds upon previous work on the economics of lottery adoption by incorporating the collective action logic developed in an important series of works by Mancur Olson. Public choice research points out that legislators are rational maximizers, and act within a costbenefit framework in attempting to implement means of budget finance. Discrete-time hazard models presented suggest that lottery adoption is more likely to occur in older states where rent seeking groups are older and more organized, and can more effectively engage in efforts for collective action (and benefits). By implementing lotteries as taxshifting mechanisms, the role of, government and the direction of social evolution are also altered.     

A statistical and probabilistic analysis of popular lottery tickets

We investigate statistical and probabilistic aspects of a data set of 2588 lottery tickets purchased for the German 6/49 lottery drawing of 16.10.1993 in Baden–Württemberg. Roughly speaking, each of these combinations was chosen at least 50 times above average. 288 of these most popular tickets represent past winning numbers (or modifications thereof) from various lotteries. The vast majority of the remaining tickets is filled out from aesthetic points of view. In this respect, some new random variables are introduced and studied.     

Universal Pareto dominance and welfare for plausible utility functions

We study Pareto efficiency in a setting that involves two kinds of uncertainty: Uncertainty over the possible outcomes is modeled using lotteries whereas uncertainty over the agents’ preferences over lotteries is modeled using sets of plausible utility functions. A lottery is universally Pareto undominated if there is no other lottery that Pareto dominates it for all plausible utility functions. We show that, under fairly general conditions, a lottery is universally Pareto undominated iff it is Pareto efficient for some vector of plausible utility functions, which in turn is equivalent to affine welfare maximization for this vector. In contrast to previous work on linear utility functions, we use the significantly more general framework of skew-symmetric bilinear (SSB) utility functions as introduced by Fishburn (1982). Our main theorem generalizes a theorem by Carroll (2010) and implies the ordinal efficiency welfare theorem. We discuss three natural classes of plausible utility functions, which lead to three notions of ordinal efficiency, including stochastic dominance efficiency, and conclude with a detailed investigation of the geometric and computational properties of these notions.     

New evidence on the origins of corporate crime

The intuition that poorly performing corporations are more likely to engage in crime is found throughout the contemporary literature on the economics and law and economics of corporate misconduct. Yet little evidence of such a relationship exists. This paper presents new evidence on the relationship between prior performance and corporate crime, using panel data on public corporations, 1975–92. When prior performance is measured in terms of earnings, only very weak evidence of a relationship is found. However, we find that a low rate of sales or employment growth by the firm tends to be a good predictor of environmental crime, and that environmental crime tends to occur in industries that have had relatively high rates of growth, as measured by employment or sales. This suggests that it is the performance of the firm rather than or relative to that of the industry that matters. Support for this finding is robust. The data provide weaker support for the notion that prior performance affects the occurrence of other types of corporate crime, particularly fraud. This may reflect the presence of mechanisms through which potential fraud victims, unlike potential environmental crime victims, can and do respond to events that would increase their chances of becoming crime victims by taking steps to prevent it. Finally, larger firms are found significantly more likely to have engaged in crime than smaller firms, in contrast to recent suggestions in the literature.     

外来务工人员彩票消费行为影响因素分析

基于外来务工人员收入水平较低、受教育水平普遍不高等特征,从个体本身和社会环境两个方面构建了影响其彩票消费行为的影响因素体系,并运用DEMATEL模型分析了各因素间的交互作用关系,得出原因因素与结果因素。主要结论为:影响外来务工人员彩票消费行为的关键性因素是阶层特征、彩票价格、娱乐方式和投机心理,最后提出了引导外来务工人员理性消费的政策性建议。     

彩票文化能够影响企业财务违规行为吗？——来自地区彩票消费的证据

文化作为非正式制度的核心组成,是影响企业行为的重要因素。基于彩票文化视角,考察了地区文化对企业财务违规的影响,发现地区彩票文化越盛行,个体的冒险倾向和风险容忍度越强,企业财务违规的可能性越大。异质性分析结果表明:当企业面临的业绩压力较大时,彩票文化对企业违规的正向影响更加明显,而良好的治理水平有利于缓解两者之间的关系;彩票文化浓厚的地区,企业财务决策偏于激进,财务信息质量较低。研究成果为规范企业行为、促进资本市场健康发展提供了一定的理论借鉴和实践启示。     

Teen employment, poverty, and the minimum wage: Evidence from Canada

In May 2007, the U.S. Congress enacted legislation, which increased the Federal minimum hourly wage from $5.15 to $7.25, over a two year time period. This increase to the minimum wage was the first in nearly a decade and was approved with the objective of alleviating poverty among low-income households. However, a higher minimum wage may result in more unemployment and poverty. We exploit time-series variation in minimum wages set by Canadian provinces between 1981 and 2004. OLS and IV results suggest that a 10% increase in the minimum wage is significantly correlated with a 3%-5% drop in teen employment. Further, a 10% rise in the minimum wage is also significantly associated with a 4%-6% increase in the percentage of families living under Low Income Cut Offs (LICOs). Difference-in-difference estimates from the 1993, 1995, and 1998 waves of the Survey of Consumer Finances (SCF) support these findings as they suggest that income earned by teens constitutes a non-trivial portion of household income for families beneath Low Income Cut Offs. Therefore, a higher minimum wage may paradoxically result in a significant negative shock to household income among low-income families.     

Stochastic utility theorem

This paper analyzes individual decision making. It is assumed that an individual does not have a preference relation on the set of lotteries. Instead, the primitive of choice is a choice probability that captures the likelihood of one lottery being chosen over the other. Choice probabilities have a stochastic utility representation if they can be written as a non-decreasing function of the difference in expected utilities of the lotteries. Choice probabilities admit a stochastic utility representation if and only if they are complete, strongly transitive, continuous, independent of common consequences and interchangeable. Axioms of stochastic utility are consistent with systematic violations of betweenness and a common ratio effect but not with a common consequence effect. Special cases of stochastic utility include the Fechner model of random errors, Luce choice model and a tremble model of [Harless, D., Camerer, C., 1994. The predictive utility of generalized expected utility theories. Econometrica 62, 1251–1289].     

即开型彩票配送策略研究

国家垄断发行的即开型彩票有着明显的市场特征,配送是即开型彩票市场运营的重要环节,需围绕市场组织配送工作。通过对即开型彩票配送过程调查研究发现,现行的区域经理配送方式存在较大的问题,应积极推行第三方配送,并以此为基础打造高效的即开型彩票配送系统,为彩票市场拓展和销量增长提供有效支撑。     

The joint decision to manage earnings through discretionary accruals and asset sales around insider trading: Taiwan evidence

This study assesses the joint decision of multiple earnings–management tools around insider trading. The Taiwanese evidence indicates significantly higher magnitudes of both discretionary accruals and asset sales before insider selling. In addition, to investigate the endogenous relationship between discretionary accruals and asset sales, this study develops a set of simultaneous equations and includes the inverse Mill’s ratio as a regressor to account for firms that choose not to use asset sales. The results indicate a marginal complementary correlation between discretionary accruals and asset sales before insider selling. Further tests find this complementary correlation becomes stronger when accompanying abnormal insider selling. The findings support the view that insiders consider both tools jointly and adjust them as complements to meet their directional earnings management objective.     

Employee attitudes,customer satisfaction,and sales performance: assessing the linkages in US grocery stores

Using store‐level panel data for a major supermarket company, we investigate the linkages between employee attitudes, customer satisfaction, and sales performance, while controlling for observed and unobserved differences across stores. We find that employee attitudes positively affect customer satisfaction with service but do not affect customer satisfaction with quality or value. Additionally, we find that customer satisfaction with service positively affects sales performance. Our results suggest that employee attitudes affect sales performance through their impact on customer service. Copyright © 2008 John Wiley & Sons, Ltd.     

Exploring environmental,social, and governance disclosure effects on the S&P 500 financial performance

Much of the literature measuring the relationship between environmental, social, and governance (ESG) scores and firm performance treats the score as a measure of sustainability performance. In this study, we treat a firm's ESG score as a demonstration of strategic choice in the level of transparency that results in increased firm performance as measured by Tobin's Q and return on assets. Performance differences are a result of choice moderated by the size of the firm as measured by employees and sales. We analyze 467 firms in the S&P 500 from 2009 to 2015. Applying legitimacy and stakeholder theory, we find that there is significant difference between groups with respect to disclosure and performance. The results of quartile analysis by sales, capitalization, and Tobin's Q are relevant to understand the influence that the ESG score has on financial performance. ESG influences on Tobin's Q are greatest for large firms as measured by sales, as opposed to the ESG affects on Tobin's Q and return on asset for smallest firms as measured by market capitalization.