| Summary: | 碩士 === 中原大學 === 國際經營與貿易研究所 === 105 === Abstract
This paper adopts panel smooth transition autoregression (PSTAR) models to evaluate the threshold effects of price level and unemployment on lottery sales. To perform the empirical estimation, we employ the panel data of lottery sales in 42 US states during the period of 2003 to December 2011. Thus, we have 4536 observations.
The empirical results are summarized as follows:
1. The threshold effects of price level and unemployment on lottery sales are nonlinear.
2. A rise in unemployment will lead to the decrease of a family’s income. To compensate for the decrease, the members of the family increase the incentive for purchasing lottery tickets, which causes a more volatile in lottery sales and a smaller persistence of lottery sales. Contrarily, a decrease in unemployment will increase a family’s income, which decreases the incentive for purchasing lottery tickets and the volatile in lottery sales, and increases the persistence of lottery sales.
3. A rise in consumer price level will reduce the real income of a family. To compensate for the loss in real income, the members of the family have higher incentive for purchasing lottery tickets. Again, this will cause a more volatile in lottery sales and a smaller persistence of lottery sales. On the contrary, a decrease in consumer price level will increase a family’s real income, which decreases the incentive for purchasing lottery tickets and the volatile in lottery sales, and increases the persistence of lottery sales.
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