Poor people spend 9% of income on lottery tickets; here's why

[dmallind]

29. net income

Me? I buy $10 worth when it gets into the big numbers. Done so last 3 times and will tonight. I probably spend $150/year on tickets - and know full well the odds of it being anything more than a license to daydream are minuscule.

But I understand statistics. I use them daily. And people can get too dismissive of a priori probabilities. Sure the jackpot odds are well into nine figures, but consider this for a moment. If you go into a restaurant or bar this weekend of anything but the most limited appeal in anything beyond a tiny isolated hamlet, look around. Try and work out the odds of those people you see and only those people you see being there, out of everyone who has ever visited or considered it, all the options they had for food/beer, and all the times it's been open. Nine figures disappears pretty quickly, and yet nobody bats an eye. Mundane events are often spectacularly improbable if you had to estimate their likelihood in advance. Probability functions collapse after the event, and somebody(s) will eventually inevitably win, probably tonight.

Those nine figure probabilities happen every couple of weeks or so in the normal course of lotteries themselves. Not only are many many millions of tickets sold even on normal days let alone today, but people often look at probabilities as if you need to try 195MM times to see a 1/195MM chance occur, when it is just as likely (1/195MM of course) to happen on the 1st try, or 41st or whatever.