IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v213y2022ics0165176522000477.html
   My bibliography  Save this article

Income elasticity of demand for horse wagering — Large-scale evidence from online betting accounts

Author

Listed:
  • Forrest, David
  • Kainulainen, Tuomo
  • Saastamoinen, Jani
  • Suhonen, Niko

Abstract

The paper investigates income elasticity of demand for online horserace betting, using individual account data and administrative data from Finland. Overall income elasticity is positive but low. However, elasticity varies substantially across the income distribution from near-zero at the bottom to unity among higher income groups. Increased betting expenditure as income increases is associated with greater intensity rather than with greater frequency of betting.

Suggested Citation

  • Forrest, David & Kainulainen, Tuomo & Saastamoinen, Jani & Suhonen, Niko, 2022. "Income elasticity of demand for horse wagering — Large-scale evidence from online betting accounts," Economics Letters, Elsevier, vol. 213(C).
    • Handle: RePEc:eee:ecolet:v:213:y:2022:i:c:s0165176522000477
    DOI: 10.1016/j.econlet.2022.110356
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176522000477
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2022.110356?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James Rude & Yves Surry & Robert Kron, 2014. "A generalized double-hurdle model of Swedish gambling expenditures," Applied Economics, Taylor & Francis Journals, vol. 46(34), pages 4151-4163, December.
    2. Kathryn L. Combs & John A. Spry, 2019. "The Effects Of Lotto Game Changes And Large Jackpots On Income Elasticities And Sales," Contemporary Economic Policy, Western Economic Association International, vol. 37(2), pages 261-273, April.
    3. Thomas A. Garrett, 2016. "The (Aggregate) Demand For State-Lottery Tickets: What Have We Really Learned?," Contemporary Economic Policy, Western Economic Association International, vol. 34(3), pages 475-482, July.
    4. David Forrest & O. David Gulley, 2009. "Participation and level of play in the UK National Lottery and correlation with spending on other modes of gambling," International Gambling Studies, Taylor & Francis Journals, vol. 9(2), pages 165-178, August.
    5. Brad R. Humphreys & Yang Seung Lee & Brian P. Soebbing, 2010. "Consumer behaviour in lottery: the double hurdle approach and zeros in gambling survey data," International Gambling Studies, Taylor & Francis Journals, vol. 10(2), pages 165-176, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tim Friehe & Mario Mechtel, 2017. "Gambling to leapfrog in status?," Review of Economics of the Household, Springer, vol. 15(4), pages 1291-1319, December.
    2. John Eakins, 2016. "Household gambling expenditures and the Irish recession," International Gambling Studies, Taylor & Francis Journals, vol. 16(2), pages 211-230, August.
    3. Tansel, Aysit & Keskin, Halil Ibrahim, 2017. "Education Effects on Days Hospitalized and Days out of Work by Gender: Evidence from Turkey," IZA Discussion Papers 11210, Institute of Labor Economics (IZA).
    4. Frank Crowley & John Eakins & Declan Jordan, 2012. "Participation,Expenditure and Regressivity in the Irish Lottery:Evidence from Irish Household Budget Survey 2004/2005," The Economic and Social Review, Economic and Social Studies, vol. 43(2), pages 199-225.
    5. Mandikiana, Brian W., 2021. "Choice and expenditure: A double hurdle model of private tutoring in Qatar," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 1-15.
    6. Thibaut, Erik & Vos, Steven & Scheerder, Jeroen, 2014. "Hurdles for sports consumption? The determining factors of household sports expenditures," Sport Management Review, Elsevier, vol. 17(4), pages 444-454.
    7. Bernd Frick & Pamela Wicker, 2018. "The Monetary Value of Having a First Division Bundesliga Team to Local Residents," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 70(1), pages 63-103, February.
    8. Brochado, Ana & Santos, Maria & Oliveira, Fernando & Esperança, José, 2018. "Gambling behavior: Instant versus traditional lotteries," Journal of Business Research, Elsevier, vol. 88(C), pages 560-567.
    9. Kwamena K. Quagrainie & Jingjie Chu, 2019. "Determinants of Catch Sales in Ghanaian Artisanal Fisheries," Sustainability, MDPI, vol. 11(2), pages 1-10, January.
    10. Pamela Wicker & John C Whitehead & Daniel S Mason & Bruce K Johnson, 2017. "Public support for hosting the Olympic Summer Games in Germany: The CVM approach," Urban Studies, Urban Studies Journal Limited, vol. 54(15), pages 3597-3614, November.
    11. Humphreys, Brad & Perez, Levi, 2011. "Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries," Working Papers 2011-17, University of Alberta, Department of Economics.
    12. Tamru, Seneshaw & Minten, Bart & Alemu, Dawit & Bachewe, Fantu Nisrane, 2016. "The rapid expansion of herbicide use in smallholder agriculture in Ethiopia: Patterns, drivers, and implications," ESSP working papers 94, International Food Policy Research Institute (IFPRI).
    13. Erik Thibaut & John Eakins & Steven Vos & Jeroen Scheerder, 2017. "Time and money expenditure in sports participation: The role of income in consuming the most practiced sports activities in Flanders," Sport Management Review, Taylor & Francis Journals, vol. 20(5), pages 455-467, December.
    14. David Forrest, 2008. "Gambling Policy in the European Union: Too Many Losers?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(4), pages 540-569, December.
    15. James Rude & Yves Surry & Robert Kron, 2014. "A generalized double-hurdle model of Swedish gambling expenditures," Applied Economics, Taylor & Francis Journals, vol. 46(34), pages 4151-4163, December.
    16. Alejandro Díaz & Levi Pérez, 2021. "Setting The Odds Of Winning The Jackpot: On The Economics Of (Re) Designing Lottery Games," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 168-177, January.
    17. Will E. Cummings & Douglas M. Walker & Chad D. Cotti, 2017. "The Effect Of Casino Proximity On Lottery Sales: Evidence From Maryland," Contemporary Economic Policy, Western Economic Association International, vol. 35(4), pages 684-699, October.
    18. Eakins, John, 2016. "An application of the double hurdle model to petrol and diesel household expenditures in Ireland," Transport Policy, Elsevier, vol. 47(C), pages 84-93.
    19. Luke P. Rodgers, 2020. "Don’t Tax My Dreams: The Lottery Sales Response to Gambling Tax Changes," Public Finance Review, , vol. 48(5), pages 627-649, September.
    20. Seneshaw Tamru & Bart Minten & Dawit Alemu & Fantu Bachewe, 2017. "The Rapid Expansion of Herbicide Use in Smallholder Agriculture in Ethiopia: Patterns, Drivers, and Implications," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(3), pages 628-647, July.

    More about this item

    Keywords

    Betting; Horseracing; Income elasticity; Spline regression;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:213:y:2022:i:c:s0165176522000477. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.