The lottery is an arrangement where prizes, including property and cash, are awarded by a process that relies entirely on chance. Prizes can be anything from units in a subsidized housing block to kindergarten placements at a reputable public school. But the most common form of lottery is financial, where players pay a fixed amount (usually one dollar) to participate in a drawing for a large cash prize.
The practice of distributing properties or rights by lot has a long history, with many examples in the Bible and ancient records. In modern times, state governments have tended to use lotteries to raise money for their social safety nets and other expenses. But lotteries have also become popular among gamblers and speculators.
There is a certain inextricable human impulse to play the lottery, and that may help explain why the big jackpots are so tempting. But there are other factors at play as well, including a desire to escape the constraints of a fixed income and the inability to make substantial investments that would improve one’s quality of life.
Moreover, the fact that a lottery generates large amounts of money with relatively low costs—a billion tickets sold at $5 a piece produce five billion dollars for the state—encourages lawmakers to support it even in good economic times. But there are real problems with this approach. As Clotfelter and Cook report, for example, the popularity of state lotteries is unrelated to the objective fiscal health of state government.
