This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Journal: Economic Policy: Vol. 4 No. 4 (November 2012)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Policy - All Issues

AEJ: Policy Forthcoming Articles

Spatial Competition and Cross-Border Shopping: Evidence from State Lotteries

Article Citation

Knight, Brian, and Nathan Schiff. 2012. "Spatial Competition and Cross-Border Shopping: Evidence from State Lotteries." American Economic Journal: Economic Policy, 4(4): 199-229.

DOI: 10.1257/pol.4.4.199

Abstract

This paper investigates competition between jurisdictions in the context of cross-border shopping for state lottery tickets. Our theoretical model, in which consumers consider both travel costs and lottery payoffs, predicts that per-resident sales should be more responsive to prices in small states with densely populated borders. Using weekly sales data from US lotteries and drawing identification from the rollover feature of jackpots, we estimate this responsiveness and find large effects that vary significantly across states. Using these estimates, we show that competitive pressures from neighboring states may lead to substantially lower optimal prices. (JEL H27, H71, H73, R51)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (47.19 MB)

Authors

Knight, Brian (Brown U)
Schiff, Nathan (U British Columbia)

JEL Classifications

H27: Taxation, Subsidies, and Revenues: Other Sources of Revenue
H71: State and Local Taxation, Subsidies, and Revenue
H73: State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
R51: Finance in Urban and Rural Economies

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Economic Policy


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Policy - All Issues

AEJ: Policy - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us