Elasticity of Demand for Lottery Tickets Essay -- Economics Economy Fi

Elasticity of Demand for Lottery Tickets Elasticity is the responsiveness of take up or supply to the removes in monetary values or income. There argon miscellaneous formulas and guidelines to follow when trying to calculate these responses. For instance, when the ploughshare of change of the quantity claimed is great then the percentage change in price, the charter is have a go at itn to be price elastic. On the other hand, if the percentage change in demand is less than then the percentage change in price handle that of demand, supply works in a similar modality. When the percentage change of quantity supplied is greater than the percentage change in price, supply is know to be elastic. When the percentage change of quantity supplied is less then the percentage change in price, then the supply then demand is cognise to be price inelastic. The following text is rattling world examples of these economic principles. They have been provided to build a bridge between c urrent economic situations and economic principles of elasticity.The Demand for Lotto The Role of Conscious Selection In this article is a discussion about the elasticity of demand for lottery tickets. Time series data was used in a way in which the expected value of the lottery ticket would vary imputable to rollovers (Farrel 1). It was found that there are far more rollovers than expected tending(p) the lottery human body (Farrel 1). There was also or so strong certainty found that supported that individuals did not pick their numbers in a uniform matter. The inverse supply function was found by use estimates that enabled them to identify the demand elasticity (Farrel 1). This analysis was based on the U.K. home(a) Lottery that came about November 1994. With this in mind we realize that because game designs are similar throughout the world, these findings are more widely relevant (Farrel 1).The price elasticity of demand for lottery tickets shows that demand varies dep ending on the expected present from a winning ticket (Farrel 1). From this we deduce that this elasticity is relevant to the design of the lottery (Farrel 1). The way that the demand elasticity is derived is by comparing the rollover weeks with the non-rollover weeks. By doing this, the normal demand is recorded during the non-rollover weeks to see what level the demand is normally at. Then from there they can see how the demand increases as the lott... ...ing how around studies and economic research has been taking place and where. I found somewhat of the studies to be trivial. This meaning that the authors used creative techniques to figure and estimate some of the elasticities. I also found it interesting how I could relate to the real life situations such as the Lottery. For example, when the lottery starts rolling over it creates a hype, and the demand goes up. I was always aware of this phenomenon but never cognise what it actually was. BibliographyWork CitedFarrell, Lis a Hartley, Roger Lanot, Gauthier Walker, Ian The Demand for Lotto The Role of Conscious Selection, ledger of Business & Economic Statistics, Apr2000, Vol. 18 Issue 2. Mason, Paul M. Steagall, Jeffrey W., The elasticity of demand for lotto tickets and the corresponding welfare effects., Public Finance Review, Sep97, Vol. 25, Issue 5. Rashid, Muhammad Mitra, Devashis, set Elasticity of Demand and an Optimal Cash Discount Rate in Credit Policy, Financial Review, Aug99, Vol. 34 Issue. Montgomery, Alan L. Rossi, Peter E., Estimating Price Elasticities with Theory-Based Priors, daybook of Marketing Research, Nov99, Vol. 36 Issue 4.