| Abstract: | A bstract . The impact of having a state lottery on the rate of crime against property in that state is estimated. Arguments in the standard economic model of criminal activity employed here include the unemployment rate, real income per capita, presence of the death penalty in the state as a proxy for general severity of punishment , police officers per capita, the percentage of population between the ages of 5 and 24, and the presence of a state lottery. Because the decision of a state to operate a lottery may correlate with crime rates, a selectivity model was run to extract any bias, but no such bias was found. The analysis used data for the 50 states plus the District of Columbia from 1970 through 1984. The results suggest that presence of a state lottery is associated with a crime rate higher by about 3 percent, an effect both statistically significant and practically important. |
