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April 28, 2008

Lucky stores

Now that North Carolina has a state lottery, here's a question: Do stores that sell a winning lottery ticket reap any long-run benefits, that is, do people consider such stores lucky? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"That's a really interesting question. It's one that economists actually thought about. Now we have some research from the Texas lottery. Economists there found that lottery players do consider stores selling winning tickets to be lucky; that is, they found that in the week after a winning ticket is announced, the store selling that ticket experiences as much as a 38 percent increase in sales, and that sales bump does continue over time, as long as 40 weeks, although it does dissipate. And so I think what this is saying is that people may think that, 'Hey, if that store sold the winning ticket, there must be something lucky about that store.' Now, there's really no rational reason to think that way, but enough folks do think so that those stores do experience this bump in sales."

Posted by Dave at April 28, 2008 08:00 AM