Speaking of gambling…from a paper titled “Loving a bad bet: Factors that induce low-income individuals to purchase state lottery tickets,” presented at the 2008 American Economic Association annual meeting.

According to the paper, despite state lotterys having the worst odds of any form of legalized gambling, “low income individuals spend a higher percentage of their income on lottery tickets than do wealthier individuals.” One reason, unearthed during an experiment: The lottery guarantees low-income individuals fair odds relative to other income groups.

Abstract

Playing the state lottery is clearly inconsistent with expected value maximization; lotteries only return approximately 50 cents on the dollar, on average. Moreover, low-income individuals spend a higher percentage of their income, and possibly even a higher absolute amount, on lottery tickets than do wealthier individuals. However, little research has explored what factors encourage or discourage lottery ticket purchases. In a series of controlled experiments, we examine the influence of different factors on the attractiveness of playing the lottery.

Experiment 1 examines the hypothesis that people buy tickets, in part, because they view the decision to purchase a ticket myopically, meaning that they make one decision at a time, rather than broadly bracketing the decision – i.e., considering the aggregate consequences of purchasing multiple tickets.

Experiments 2 & 3 address the question of what makes state lotteries so appealing to low-income populations. In Experiment 2 we find that people are more likely to purchase tickets when they are implicitly primed to perceive that their own income is low relative to some standard, suggesting that the lottery is viewed as a means to correct low standing on the income hierarchy. In Study 3 we find that people are more likely to purchase tickets when they are subtly reminded that all income groups have an equal chance of winning. This suggests that part of the lottery’s allure for low-income individuals is that it guarantees them fair odds relative to other income groups. We discuss the policy implications of these results for deterring low-income individuals from playing the lottery and the use of lotteries to promote positive behaviors, such as saving.

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On Super Bowl betting, from The Sports Economist:

The Saints beat the Colts 31-17 for their first Super Bowl victory. It was a thrilling win, with the outcome in doubt until Tracy Porters’ 74 yard “pick six” with 3:12 left in the game and the Colts driving for the potential tying score.

The other big winner in this game was sports books. Evidence shows that bettors love two things: favorites in point spread betting and the over on total betting. According to sportsbook.com, as of about 4pm Eastern on Sunday the line was the Colts -5 and the over-under was 57. Based on action at off-shore sports books, 63% of the sides betting was on the Colts, and 66% of the totals betting was on the over. The Colts didn’t cover, and the 48 point total was well under 57. Given the bet-110-to-win-100 payoff structure on sides and totals, and the fact that the Super Bowl is the most popular sporting event to bet on all year, that translates to a big payday for sports books.

Let’s start the week with a little severe-economic-downturn-humor, courtesy of Maxine, found via the blog Economists Do It With Models.

Think Jay Leno after he’s really given up…

More bad-economy Maxine here…

Interesting post from a laid-off journalist confronting the realities of being a stay-at-home mom for the first time. From Los Angeles Moms Blog:

Unemployment puts new spin on feminism – Laura Clark

I have always rebelled against domesticity.

Maybe it was growing up with a single mom who worked. Maybe it was the fact that I can barely boil water without the risk of third-degree burns or something really bad. But maybe it’s because I was hell-bent on becoming a “career woman” while still developing ovaries in the womb.

That’s not to say I wasn’t a little jealous of my friends who had stay-at-home moms. When I’d tag along with them after school, I’d sometimes turn a little green with envy as their moms stopped whatever project they were working on to give us an after-school treat. In my house after school, I always dug out my own treat.

Since I’ve been at home this past month-plus after being laid off from my job in journalism, I haven’t had a choice in the matter — and I’m not used to that. A lack of choice.

Lots of women are having to confront this now. For me, it’s confronting the fact that I have benefited from all of those scorched bras of the 1960s and ’70s. The feminists of yesterday helped pave the way for me to almost take for granted that I could go to the college of my dreams and, upon graduation, land on my feet in a career I had chosen.

Not that it wasn’t a struggle. I had to prove myself at entry level, earning an almost laughable salary, and work my way up. But the fact that I got my foot in the door wasn’t ever a male vs. female thing for me. It was simply an “I got this on my own merits” reality.

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Remember that public debate last week between Obama and congressional Republicans?

From the New York Times:

A lot of people have taken to the idea of this kind of public give-and-take, likening it to Great Britain’s Question Time, when members of Parliament can hurl questions at the Prime Minister and his Cabinet, which they are obliged to answer.

Now, a petition is circulating on the Web and Twitter to Demand Question Time in the U.S:

We live in a world that increasingly demands more dialogue than monologue. President Obama’s January 29th question-and-answer session with Republican leaders gave the public a remarkable window into the state of our union and governing process. It was riveting and educational. The exchanges were substantive, civil and candid. And in a rare break from our modern politics, sharp differences between elected leaders were on full public display without rancor or ridicule.

This was one of the best national political debates in many years. Citizens who watched the event were impressed, by many accounts. Journalists and commentators immediately responded by continuing the conversation of the ideas put forward by the president and his opponents — even the cable news cycle was disrupted for a day.

America could use more of this — an unfettered and public airing of political differences by our elected representatives. So we call on President Barack Obama and House Minority Leader John Boehner to hold these sessions regularly — and allow them to be broadcast and webcast live and without commercial interruption, sponsorship or intermediaries. We also urge the President and the Republican Senate caucus to follow suit. And we ask the President and the House and Senate caucuses of his own party to consider mounting similar direct question-and-answer sessions. We will ask future Presidents and Congresses to do the same.

It is time to make Question Time a regular feature of our democracy.

If you want, you can sign here.

Click on an image to see it full size.

More photos here.

A post on the legal blog Lowering the Bar comments on a judge’s ruling that a $125,000 plaintiffs’ attorney fee be paid in the same $10 gift cards he “won” for his clients.

Last year, Los Angeles County Judge Brett Klein was presented with a proposed class-action settlement in which the plaintiffs’ attorney would get $125,000, but class members would get only a $10 gift card, usable only at the store that allegedly violated the law in the first place. That is an example of the much-maligned “coupon settlement,” in which a defendant can end up profiting from breaking the law because a consumer must buy something from the defendant to redeem the coupon. These can sometimes be okay, but Judge Klein didn’t think this settlement was fair.

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Some surprising info on this Mint.com chart of which income levels pay what percentage of U.S. income taxes. 47% of American households on the lower end, for example, pay no taxes, while 2% on the upper end pay 40% of all income taxes.

Fair?

On the other hand, this chart from the book Who Rules America? puts a different spin on things.

Fair?

Draw your own conclusions…

From The Unemployed Life on Recessionwire:

The Starbucks Guide to Job Status (Andrew Lipstein)

Roman bath houses, or thermae, were massive public spheres (the Baths of Diocletian covered almost one and a half million square feet) that served as public gathering spots for every cross-section of society. Today, we have Starbucks.

CFO’s, soccer moms, drifters, aspiring musicians and more aspiring musicians all wait on line together. And then there’s you, a worker type. You could be unemployed, passing yourself off as a 9-to-5er. Or, you’re collecting a fancy salary but you’d like to pretend you’re one of the unwashed—you know, for kicks. You know which one you are, but can your co-caffeinators tell? It’s all right there in your order.

Espresso, Cream, No Sugar, to go-

You are gainfully employed. Usually you would be at work now, but you had to take a trip to the bank to deposit all of those paychecks and were in the area (of course you were). Plus, some extra caffeine will give that extra boost you need to pump out the Ralston account and serve as a responsible and contributing member of the work force. Drink up, you deserved it!

Starbucks Doubleshot on Ice, with an extra Espresso shot, to go-

You are painfully employed. No one should need that much caffeine. Yes, I’ve heard Voltaire drank between 20 and 30 cups a day, but you are not in the process of writing Dictionnaire Philosophique.

Two Espressos, Black, Two Cappuccinos, Cream, No Sugar, and One Latte, Sugar, No, I mean Cream. Um, Cream and Sugar, to go-

You are employed, but soon to be on the market. Only the second week and you’ve already become the coffee runner: you need to be more assertive. Plus, the Junior Account Manager is sure to put in a bad word for you when he tastes a single morsel of sugar in his latte.

Iced Caramel Brulee Latte, to go-

You are unemployed, but you are new to that world and not quite ready to come to terms with the situation. You got something with a kick, we get it. If you really had a job you wouldn’t care how similar your coffee tasted to a custard-based dessert. It’s fine, we all like a little something silly in our coffee now and then, but be honest with yourself. And the briefcase. Everyone knows it’s empty except for last week’s Doonesbury.

Mint Mocha Chip Frappuccino, Blueberry Streusel Muffin, for here-

You are heavily unemployed. But look on the bright side: you still have two more months of unemployment benefits. You must be on the government’s dime because you are paying $4.75 for a muffin. So drink up, enjoy the frap, maybe get an almond biscotti too, peruse the classifieds and get working on that next great American novel about the Starbucks barista who fights crime on weekends.

Decaf Kenyan Home Roast, Vanilla Mini Sparkle Doughnuts, for here-

Unemployed. So unemployed. Decaf? Are you serious? Get up before the mail comes and then see if you can enjoy a nice coffee without all that happy medicine.

Black and White Cookie, to go

Hard to say. Everyone loves those cookies. Enjoy it, you enigma you.

Economy Bites is an online cooking show dedicated to helping people learn how to make economical, tasty dishes that will last almost all week. The show’s motto: “Cook on Sunday, eat till Thursday.” From the site:

The episodes are short — around four to seven minutes, and accompanied by written recipes. Dip right in with shows on falafel, tortilla soup, or mozarella mushroom meatballs. And here’s the Thai chicken pasta segment:

Yum.