Lottery Consumption And Income In Our Country Correlation Degree Analysis

As a special method of collecting funds for public, lottery presents characteristic of both tax and welfare. China lottery industry has developed rapidly closer to world level from several standards. However, theoretic and empirical researches have already believed that lower income group purchases the most, personal lottery expenditure and income possess regressive relationship. But such purchasing structure would influence future development and welfare effect of china lottery industry. This paper analyzes the relationship between personal lottery expenditure and income from macro and micro viewpoints on the basis of lottery theories and empirical methods and combining Chinese situation to make adjustments and innovation.From micro viewpoint, this paper summarizes gambling theories in behavior economics and analyzes the effects of individual characters especially revenue character on lottery participation firstly. And then makes empirical examination through lottery expenditure model using investing data in Yangzhou. This part emphasizes the relationship between lottery expenditure and income, whether they’re related regressively, and what that expenditure curve shapes. The results show that personal characteristics of lottery consumers represent male, married, between40-50years old and with lower record in YangZhou. Liberal and laid-off workers expend more on lottery. Lottery expenditure curve basing on personal income displays inversed U pattern, low and high income classes purchase more. However, proportion of lottery expenses in total income declines with the growing income and represents regressive nature.From macro viewpoint, this paper regards lottery as one type of income tax and uses tax study methods to exam total and regional income characteristic of lottery. Firstly it utilizes suits methods which studies tax nature to analyze what that exactly and how it would be in our lottery industry. Then this paper uses panel data from1987-2007on lottery sales and economic development to exam whole and regional differences on lottery tax burdens. Focal points are analyzing whether lottery tax burden as whole is regressive and whether backward areas undertake more lottery burden, whether regional lottery development rapid is unbalanced with regional economic development. The results show that lottery tax burden appears progressive character, but with low degree close to proportional tax. The staged nature of Suits curve, evidently regional dummy variables and regional regression analysis all show that lottery development is disequilibrium regionally in China. Economic development rapid is higher in the east but reversely the lottery industry, vice versa in the west.All above shows that major participators belong to low-income class and located in undeveloped areas. This purchase structure will influence future development of lottery industry. With the development of economy and the increase of resident income, market potential in high-income class will be larger and larger.