Elasticity of Demand for UK National Lottery Tickets

Abstract

This paper examines sales patterns in the first three years of the UK National Lottery in order to estimate price elasticity of demand. Our long-run estimate is very close to the value of minus one required for revenue maximization. We find that the UK Government has succeeded in setting a framework for the National Lottery that maximizes turnover and therefore the amount of money available for both Exchequer revenue and "Good Causes."