That's the problem with poverty, as I well know: once one is impoverished, it's almost impossible to get out of it by one's self.

Once one starts sliding into the abyss, there are interest fees, late fees, fines, collections, repossessions, court fees, extra days lost to work because of those things as well as poor health (and no health insurance), et cetera. Lucky poor people may have as their most valuable possession a car, which is also a depreciating asset with its own array of fees, fines, and so on.

A poor person's entire life is a risk comprised of difficult choices between various other risks, often lived only one to two weeks away from homelessness, malnutrition, and death. A lottery ticket is nothing compared to deciding whether to eat or pay bills, whether to drive to work without an inspection sticker or stay home, whether to eat the moldy cheese or go hungry. It doesn't take long to notice that and begin to take it into account, and when one does, a way out is even less visible.

Fifty-two dollars a year isn't going to help a poor person get out of that quagmire, ever. If these researchers have a strategy for "investing" that same fifty-two bucks, I'd sure like to know about it. I'll bet with a lot of hard work you could turn it into a hundred in ten years--still worthless. Do it every year for ten years and you might have, what, maybe a couple thousand? Still worthless to those of us being nickeled and dimed, still unlikely to balance the sheet.

Furthermore, poor people have no way to "invest" their paltry sums, anyway. What are you gonna do? Buy a bond and pray you don't die in the years it takes before it returns you a couple of bucks?

So what's left? The words of Livy: "In difficult and desperate cases, the boldest counsels are the safest." When you're burning in Hell, your only chance for relief is finding that snowball. But you probably have to be in Hell to know that.

It is a shared dream, like a hollywood fantasy, or Playboy, if each of us pays into it, we can all have that feeling of Could Be, and THAT is what they buy. It is therefore not irrational, but adaptive, it has ecological validity to have that dream. There is a real and tangible gain, but it is in neurochemical reactions in that impossible interim between the purchase of the ticket and the final let down; the fact that it lets down at the end is no different from the dumb endings that most fantasies have, that's not the point of buying the travel ticket, the point is the JOURNEY.

So I still think the study is naive, because they measured the wrong thing. Instead of being anthropological or even evolutionary biologist about it, they didn't start with the reality "They buy tickets" and then ask "Why?" they started with the premise it was a "bad decision" and then asked "Why are they not rational?" -- my point is that they ARE being rational, because we already have research that shows the value of such myths of release in enduring the seeming impossible reality.

"a chance out of poverty" or "a wish to end all your financial problems" - it means the same thing: paying a small amount of money on a chance that it will pay off big. In my opinion the term investment is correctly applied here in that there is money spent that will hopefuly give gains greater than the initial sum put in.

Though, what I actually read from your statement is that you take issue with the fact that there is an implied process and underlying strategy that isn't reflected in your experience.

My experience suggests a bit of both sides. My father and my foster father both purchased tickets regularly. A percentage of their earnings went, each week, to these tickets. It was the hope of a large return that drove them (and, one could argue, addictive properties of their personality) to spend what meager funds they had on this unbalanced game. They did this EVERY WEEK.

So, although there were parts relating to addiction, they honestly believed that a better life was possible and that the payoff was worth the money they put into it, day after day. I consider it an investment on their part. A dumb investement strategy and one biased towards instant gratification, but a strategy nonetheless.

In the end, I don't think the report mischaracterized the phenomenon, just isolated one part of a large social issue and reported on it.

Eric

as a low-income earner for much of my adult life, I maybe have more experience with these customers than a tenured professor :)

People don't buy an "investment", they don't buy "a chance out of poverty", although they may say that. What they buy is the momentary FEELING that any such end to the poverty could happen. Posted elsewhere on this blog is a study on the adaptive advantage of "dreaming big" and what you buy for $4 is not a mathematical probability, but a fantasy, a dream, a wish.

Where else can you buy a wish to end all your financial problems for $4? Sales figures show that economic depression also boosts the popularity of fashion magazines and happy-fantasy hollywood movies. Do people think they will be Norma Jean and get discovered and be rich and famous? No, not REALLY, although they may say so. What they buy for the price of the magazine or the price of the ticket is the dream, the myth, the IDEA that maybe, just maybe fairy tales do come true.

Excellent!

But it's not only that "Some poor people see playing the lottery as their best opportunity for improving their financial situations", some people see the lottery as their ONLY hope or ever getting out of the daily grind.

State lotteries are really just another way for states to gain revenue w/o actually taxing the population.

Also, if you notice, all USA lotteries are based on ever bigger prizes. It is my contention that lotteries would help those who choose to play more by offering many more smaller prizes instead of one huge prize and then insignificant secondary prizes. So instead of one $50,000,000 prize, a few prizes in the low 6 figure range and many more in the even lower ranges, making the top prize say $5,000,000 and spreading the remaining amounts out among the lower tiers would encourage more people to play.

Lotto Makes Sense, Even for Losers
http://www.nytimes.com/2007/03/11/weekinreview/11carey.html

And here are some interesting lottery stories and analysis:
http://politicalcalculations.blogspot.com/search/label/lottery

Interesting, but the advertisers already seem to know how to con people into wasting money on lottery tickets. In my area they are constantly mentioning all the expensive thing you could buy if you won. Just another way of making people feel poorer than they are.

Neither is encouraging poor people to put money into bank accounts worthwhile. The kind of interest rates they can get are far below the inflation rate. So any money put away is being wasted. It would be better to encourage them to put the money where their mouth is in the form of healthier food. Or encouraged to get more schooling.

Better yet, how about psychologists studying how to get politicians to start doing things for the populace they claim to be serving instead of helping those who are giving them "campaign donations" and such.