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Spatial probit and the geographic patterns of state lotteries

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  • Cletus C. Coughlin
  • Thomas A. Garrett
  • Ruben Hernandez-Murillo

Abstract

We implement a spatial probit model to differentiate states with a lottery from those without a lottery. Our analysis extends the basic spatial probit model by allowing spatial dependence to vary across geographic regions. We also separate the spatial effects of neighbors versus non-neighbors. The methodology provides consistent and efficient coefficient estimation in light of the simultaneity in spatial dependence. We find evidence of spatial dependence and spatial heterogeneity in lottery usage, and we find that spatial patterns differ significantly by geographic region. The importance of spatial dependence in state lottery usage suggests the need to consider spatial effects in empirical models examining the use of any policy tool by subnational governmental units.

Suggested Citation

  • Cletus C. Coughlin & Thomas A. Garrett & Ruben Hernandez-Murillo, 2004. "Spatial probit and the geographic patterns of state lotteries," Working Papers 2003-042, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:2003-042
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    References listed on IDEAS

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    9. Ruben Hernandez-Murillo, 2003. "Strategic interaction in tax policies among states," Review, Federal Reserve Bank of St. Louis, vol. 85(May), pages 47-56.
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    Cited by:

    1. Sarker, M. Mizanur Rahman, 2012. "Spatial modeling of households’ knowledge about arsenic pollution in Bangladesh," Social Science & Medicine, Elsevier, vol. 74(8), pages 1232-1239.
    2. Jia Yan & Xiaowen Fu & Tae Oum, 2008. "Exploring Network Effects of Point-to-Point Networks: An Investigation of the Spatial Entry Patterns of Southwest Airlines," Working Papers 2008-21, School of Economic Sciences, Washington State University.
    3. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    4. Fu, Xiaowen & Jin, Huan & Liu, Shaoxuan & Oum, Tae H. & Yan, Jia, 2019. "Exploring network effects of point-to-point networks: An investigation of the spatial patterns of Southwest Airlines’ network," Transport Policy, Elsevier, vol. 76(C), pages 36-45.
    5. Corinne Autant-Bernard, 2006. "Where Do Firms Choose to Locate Their R&D? A Spatial Conditional Logit Analysis on French Data," European Planning Studies, Taylor & Francis Journals, vol. 14(9), pages 1187-1208, May.
    6. Luisa Alamá-Sabater & Andrés Artal-Tur & José Navarro-Azorín, 2011. "Industrial location, spatial discrete choice models and the need to account for neighbourhood effects," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(2), pages 393-418, October.

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