A Tax on People Who Can’t Do Math

I’m still on hiatus (and still unemployed) but I spent some of what was a glorious holiday weekend in New England indoors, surfing the web and reminding myself why I started Bad Money Advice.Lottery Tickets Crop

WalletPop had a post that caught my eye. Poor people spend 9% of income on lottery tickets; here’s why.  It discusses a theory about why “poor households, with annual take-home incomes under $13,000, on average, spend $645 a year on lottery tickets, which comes to about 9% of their yearly income.”

I am not going to express an opinion on the theory, because I didn’t have the patience to read the whole post. I couldn’t get past the first paragraph. 645 divided by 13,000 is 4.96%. That confused me until I realized the statistic refers to households with incomes of at most $13,000, and not an average of $13,000. It was that phrase “which comes to” that threw me off.

Still, I’m not completely satisfied. Why $13,000? The Census has easy-to-find data on households making under $15,000, a group that accounted for 8% of all American households, and a smaller proportion of total population. (About two thirds of those households consist of only one person. I will speculate that a non-trivial portion are college students.)

It is a reasonably rough guess that under $13,000 is the bottom 5% of households. That is not exactly mainstream America. To put it in perspective, the top 5% of household income starts at $177,000 per annum. So under $13,000 is more than a little poor. And yet, those households actually spend more in absolute terms on lotteries, on average, than households in the richer 95%? (The overall household average is around $514.)

Not being one to overestimate the rationality of the American consumer, I am not about to dismiss the 9% of income figure out of hand. But it is, at the very least, awfully peculiar and the sort of statistic that, if not literally false, is likely to be substantially misleading.

The thing about looking at the very bottom rung of income level is that it includes quite a few people for whom their current income is not indicative of their true economic status: students, the unemployed, retirees, etc. These are people who typically spend more, sometimes a lot more, than they make. So measuring any type of expenditure relative to their income will tend to give you surprisingly large numbers.

That said, let’s track down the 9% number. The WalletPop post refers to a recent item at The Consumerist, one of their quickie posts that slap a few sentences around a paragraph quoted from elsewhere on the web. Their tiny bit of original content tells us that “A recent study found that poor folks – households earning under $13,000 per year – spend about 9% of all their income on lottery tickets.”

The blog post The Consumerist links to, at The Frontal Cortex, starts with the line “Here’s an old post from July 08.” So I guess recent is a relative term.

That post’s author, Jonah Lehrer, a contributing editor at Wired and author of, among other books, Proust Was a Neuroscientist, does indeed give the $13,000/$645/9% tidbit. He implies, possibly inadvertently, that it is from what was back then a recently published paper by three academics on why poor people buy lottery tickets.

It is an interesting paper, although it is not, in fact, about what WalletPop, The Consumerist, or Mr. Lehrer would lead you to believe. It makes the case that poor folks are more likely to play the lottery because they feel poor relative to other members of society, rather than because of some absolute effect of poverty.

It is possible that I just did not read the paper carefully enough, but I could not find the 9% statistic. On the other hand, I did find, in the very first paragraph of the introduction, a reference to another statistic that “households with an income of less than $10 000 spend, on average, approximately 3% of their income on the lottery.”

Given how directly contradictory that statistic is to the one cited by Lehrer in his post, I am going to assume that he did not read the first paragraph of the paper he was writing about. Indeed, I will then go out on a limb and speculate that if he did not read the first paragraph he likely skipped the whole thing. (Other than the abstract, which he quotes and links to.)

So here is what happened. Lehrer sees an interesting abstract of a new paper. He uses it as inspiration for a short riff on how lotteries don’t just appeal to poor folks, they help keep them poor. (Oh so clever! No wonder he has a job and I don’t.) Along the way he tosses out the 9% statistic.

So proud is Lehrer of this post that he re-runs it two years later, when it is noticed by The Consumerist, which knows a buried lead when they see one. Ignoring the fact that the post is actually a bit stale, and reasonably assuming that the academic paper Lehrer refers to must be the source for the statistic, they run a post with 9% of income on lottery tickets as the headline. They do not, evidently, bother to find and read the paper itself.

Which brings us back to WalletPop, where author Geoff Williams spends Memorial Day Weekend explaining to readers why it is that poor people spend 9% of their income on the lottery. He knows that they do because The Consumerist, arguably the #1 personal finance blog on the planet, says so.

This is where urban legends come from.

And from where, after all, did the 9% actually originate? This interview at Time.com (from 2009) mentions it and cites a study by something called the Commission on Thrift. I found their website. It seems to be a project of the Templeton Center for Thrift and Generosity at the Institute for American Values. (And from the Institute for American Values website, I learn it is a think tank concerned with the importance of marriage as an institution and the war on Islamic terror, as well as thrift.)

The sole output of the Commission on Thrift appears to be a report called “For A New Thrift: Confronting the Debt Culture.” The 9% is probably in there somewhere, but to find out I would have to order the book, and it costs $7. That wouldn’t be very thrifty of me, now would it?

3,436 Comments

Other Links to this Post

  1. Weekend reading: BP’s dividend and FTSE value — June 5, 2010 @ 5:33 am

  2. The Spending Habits of The Poor | Weakonomi¢s — June 9, 2010 @ 8:42 pm

  3. Top Frugality Blogs of 2011 | Frugal Dad — December 5, 2011 @ 6:56 pm

  4. fireplace repair cost peoria — March 10, 2023 @ 8:26 am

  5. shower refinishing near me — March 10, 2023 @ 10:30 am

  6. imprinted protective eyewear — March 10, 2023 @ 12:19 pm

  7. repair gas fireplace peoria — March 10, 2023 @ 2:56 pm

  8. corporate gifts — March 10, 2023 @ 3:11 pm

  9. bathroom reglazing near me — March 10, 2023 @ 5:30 pm

  10. metal water bottles — March 10, 2023 @ 7:02 pm

  11. gas fireplace repair near me — March 10, 2023 @ 9:26 pm

  12. imprinted safety glasses — March 10, 2023 @ 9:42 pm

  13. Clock making parts — March 11, 2023 @ 12:14 am

  14. bathroom refinishing — March 11, 2023 @ 12:32 am

  15. gas fireplace repair — March 11, 2023 @ 4:03 am

  16. branded face masks — March 11, 2023 @ 4:22 am

  17. mechanisms for clocks — March 11, 2023 @ 7:23 am

  18. metal water bottles — March 11, 2023 @ 8:46 am

  19. mechanisms for clocks — March 11, 2023 @ 2:28 pm

  20. bathtub restoration — March 11, 2023 @ 2:43 pm

  21. logo t shirts — March 11, 2023 @ 3:51 pm

  22. fireplace inspection — March 11, 2023 @ 5:12 pm

  23. clock mechanisms — March 11, 2023 @ 9:30 pm

  24. tub reglazing — March 11, 2023 @ 9:44 pm

  25. personal promotional products — March 11, 2023 @ 10:52 pm

  26. Click Here — March 12, 2023 @ 12:41 am

  27. tile resurfacing near me — March 12, 2023 @ 4:47 am

  28. embroidered hats — March 12, 2023 @ 5:53 am

  29. gas fireplace maintenance peoria — March 12, 2023 @ 6:15 am

  30. mechanisms for clocks — March 12, 2023 @ 11:34 am

  31. gas fireplace services and repairs — March 12, 2023 @ 12:45 pm

  32. Click Here — March 12, 2023 @ 12:53 pm

  33. bathtub restoration — March 13, 2023 @ 1:41 am

  34. gas fireplace repair service near me — March 13, 2023 @ 1:56 am

  35. find more info — March 13, 2023 @ 8:51 am

  36. promotional coffee mugs — March 13, 2023 @ 10:11 am

  37. DIY clock replacement parts — March 13, 2023 @ 1:47 pm

  38. clock mechanisms — March 13, 2023 @ 2:09 pm

  39. clocks for businesses — March 13, 2023 @ 4:51 pm

  40. corporate gifts — March 13, 2023 @ 5:41 pm

  41. rv storage — March 13, 2023 @ 7:11 pm

  42. small clock inserts — March 13, 2023 @ 9:02 pm

  43. Clock kits and dials — March 13, 2023 @ 9:11 pm

  44. Printed Gear — March 13, 2023 @ 10:50 pm

  45. wireless time clocks — March 13, 2023 @ 11:32 pm

  46. storage unit — March 14, 2023 @ 1:27 am

  47. clock parts manufacturing — March 14, 2023 @ 3:36 am

  48. outdoor clocks for hospitals — March 14, 2023 @ 5:40 am

  49. music festival usa — March 14, 2023 @ 6:21 am

  50. replacement parts for clocks — March 14, 2023 @ 9:52 am

  51. time movement hands — March 14, 2023 @ 9:59 am

  52. imprinted promotional gifts — March 14, 2023 @ 10:43 am

  53. weston colorado americana festival — March 14, 2023 @ 12:32 pm

  54. promotional products — March 14, 2023 @ 1:10 pm

  55. hour hands for clocks — March 14, 2023 @ 4:17 pm

  56. reusable face masks — March 14, 2023 @ 4:49 pm

  57. self storage units missoula mt — March 14, 2023 @ 8:26 pm

  58. personalised engraved pens — March 14, 2023 @ 11:26 pm

  59. clock dial face fit ups — March 14, 2023 @ 11:45 pm

  60. weston colorado caveman music festival — March 15, 2023 @ 2:15 am

  61. custom surgical masks — March 15, 2023 @ 3:28 am

  62. storage rental — March 15, 2023 @ 3:37 am

  63. badge reel holder — March 15, 2023 @ 5:53 am

  64. accessories for clocks — March 15, 2023 @ 6:35 am

  65. how to replace clock hands — March 15, 2023 @ 7:11 am

  66. click here — March 15, 2023 @ 8:29 am

  67. weston colorado americana festival — March 15, 2023 @ 9:21 am

  68. camper storage — March 15, 2023 @ 10:29 am

  69. business gifts — March 15, 2023 @ 10:50 am

  70. custom printed face masks — March 15, 2023 @ 12:19 pm

  71. how to build your own clock — March 15, 2023 @ 2:53 pm

  72. time synchronazation clocks — March 15, 2023 @ 3:39 pm

  73. outdoor storage — March 15, 2023 @ 5:22 pm

  74. metal water bottles — March 15, 2023 @ 6:15 pm

  75. visit website here — March 15, 2023 @ 6:44 pm

  76. clock inserts suppliers — March 15, 2023 @ 8:54 pm

  77. Facility wireless clocks — March 15, 2023 @ 10:49 pm

  78. colorado music festival — March 15, 2023 @ 11:39 pm

  79. self-storage facility — March 16, 2023 @ 12:16 am

  80. custom surgical masks — March 16, 2023 @ 1:12 am

  81. Clock kits and dials — March 16, 2023 @ 4:05 am

  82. auto sync clocks — March 16, 2023 @ 5:58 am

  83. Learn More — March 16, 2023 @ 6:18 am

  84. weston colorado live music festival — March 16, 2023 @ 7:02 am

  85. storage rental — March 16, 2023 @ 7:10 am

  86. tote bags — March 16, 2023 @ 7:40 am

  87. badge reels — March 16, 2023 @ 9:06 am

  88. parts for clocks — March 16, 2023 @ 11:13 am

  89. clocks for businesses — March 16, 2023 @ 1:09 pm

  90. vehicle storage missoula mt — March 16, 2023 @ 2:05 pm

  91. caveman live music festival — March 16, 2023 @ 2:20 pm

  92. promotional items — March 16, 2023 @ 4:36 pm

  93. Learn More — March 16, 2023 @ 6:33 pm

  94. reusable face masks — March 16, 2023 @ 8:19 pm

  95. large clock hands — March 16, 2023 @ 9:21 pm

  96. americana music fest — March 16, 2023 @ 9:43 pm

  97. personalised engraved pens — March 17, 2023 @ 2:34 am

  98. synchronized wireless clocks for sale — March 17, 2023 @ 3:45 am

  99. storage units missoula mt — March 17, 2023 @ 4:00 am

  100. large clock hands — March 17, 2023 @ 4:52 am

  101. safety kits — March 17, 2023 @ 7:27 am

  102. imprinted promotional gifts — March 17, 2023 @ 8:56 am

  103. clock inserts suppliers — March 17, 2023 @ 9:29 am

  104. facilities services companies — March 17, 2023 @ 11:03 am

  105. badge reels — March 17, 2023 @ 2:47 pm

  106. badge reel holder — March 17, 2023 @ 3:22 pm

  107. plastic dial hand — March 17, 2023 @ 5:09 pm

  108. weston colorado music festival — March 17, 2023 @ 7:34 pm

  109. badge holder — March 17, 2023 @ 9:38 pm

  110. camper storage near me — March 18, 2023 @ 12:48 am

  111. monument lake resort music festival — March 18, 2023 @ 2:45 am

  112. read more — March 18, 2023 @ 3:13 am

  113. clock inserts movements — March 18, 2023 @ 7:57 am

  114. hospital clock system — March 18, 2023 @ 8:57 am

  115. folk music festival 2023 — March 18, 2023 @ 9:53 am

  116. coffee mugs — March 18, 2023 @ 12:23 pm

  117. boat storage near me — March 18, 2023 @ 2:13 pm

  118. DIY clock hands repair — March 18, 2023 @ 3:02 pm

  119. wireless time clocks — March 18, 2023 @ 4:09 pm

  120. water bottles with logo — March 18, 2023 @ 4:15 pm

  121. weston colorado music festival — March 18, 2023 @ 5:00 pm

  122. tradeshow signs — March 18, 2023 @ 7:29 pm

  123. self storage near me — March 18, 2023 @ 8:48 pm

  124. caveman live music festival — March 19, 2023 @ 12:06 am

  125. clock repair videos — March 19, 2023 @ 12:29 am

  126. car stroage — March 19, 2023 @ 3:29 am

  127. clock accessories — March 19, 2023 @ 5:18 am

  128. clocks for businesses — March 19, 2023 @ 6:50 am

  129. promo items — March 19, 2023 @ 9:40 am

  130. storage units missoula mt — March 19, 2023 @ 10:16 am

  131. water bottles with logo — March 19, 2023 @ 10:46 am

  132. clock making replacement parts — March 19, 2023 @ 12:25 pm

  133. synchronized wireless clocks — March 19, 2023 @ 2:10 pm

  134. parts for clocks — March 19, 2023 @ 2:33 pm

  135. country music festival — March 19, 2023 @ 2:46 pm

  136. promo items — March 19, 2023 @ 4:54 pm

  137. visit website here — March 19, 2023 @ 7:30 pm

  138. public address transmitter software — March 19, 2023 @ 9:31 pm

  139. country music festival — March 19, 2023 @ 9:51 pm

  140. embroidered hats — March 19, 2023 @ 11:52 pm

  141. car storage near me — March 20, 2023 @ 12:24 am

  142. how to replace clock hands — March 20, 2023 @ 2:27 am

  143. USA Made clock movements — March 20, 2023 @ 4:47 am

  144. clocks for businesses — March 20, 2023 @ 4:55 am

  145. music festival usa — March 20, 2023 @ 5:07 am

  146. boat storage near me — March 20, 2023 @ 7:43 am

  147. clock movement — March 20, 2023 @ 9:21 am

  148. learn more — March 20, 2023 @ 12:22 pm

  149. country music festival — March 20, 2023 @ 12:39 pm

  150. branded products — March 20, 2023 @ 2:13 pm

  151. self storage units near me — March 20, 2023 @ 3:13 pm

  152. wireless time systems — March 20, 2023 @ 7:51 pm

  153. monument lake resort caveman music festival — March 20, 2023 @ 8:02 pm

  154. mechanism for clocks — March 21, 2023 @ 1:57 am

  155. colorado live music festival — March 21, 2023 @ 3:08 am

  156. imprinted promotional gifts — March 21, 2023 @ 4:29 am

  157. Best digital clocks — March 21, 2023 @ 10:14 am

  158. metal water bottles — March 21, 2023 @ 10:19 am

  159. mechanisms for clocks — March 21, 2023 @ 12:56 pm

  160. clock parts manufacturing — March 21, 2023 @ 4:06 pm

  161. wireless clocks transmitter — March 21, 2023 @ 5:19 pm

  162. metal hands — March 21, 2023 @ 7:49 pm

  163. vehicle storage missoula mt — March 21, 2023 @ 8:49 pm

  164. metal hands — March 21, 2023 @ 11:12 pm

  165. monument lake resort americana festival — March 22, 2023 @ 12:36 am

  166. metal water bottles — March 22, 2023 @ 2:18 am

  167. clock Inserts videos — March 22, 2023 @ 2:39 am

  168. storage units missoula mt — March 22, 2023 @ 4:10 am

  169. read more — March 22, 2023 @ 6:20 am

  170. sync system clock — March 22, 2023 @ 7:43 am

  171. americana music festival colorado — March 22, 2023 @ 8:04 am

  172. plastic dial hand — March 22, 2023 @ 9:33 am

  173. vehicle storage missoula mt — March 22, 2023 @ 11:33 am

  174. synchronized wireless clocks — March 22, 2023 @ 2:58 pm

  175. custom surgical masks — March 22, 2023 @ 4:10 pm

  176. how to replace clock hands — March 22, 2023 @ 4:25 pm

  177. reusable face masks — March 22, 2023 @ 5:07 pm

  178. wirelessly synchronize clocks — March 22, 2023 @ 10:03 pm

  179. water bottles with logo — March 22, 2023 @ 10:06 pm

  180. see it here — March 22, 2023 @ 11:01 pm

  181. mechanisms for clocks — March 22, 2023 @ 11:15 pm

  182. water bottles with logo — March 23, 2023 @ 12:24 am

  183. boat storage — March 23, 2023 @ 2:14 am

  184. engraved pens — March 23, 2023 @ 3:49 am

  185. synchronized clocks for stadiums — March 23, 2023 @ 5:05 am

  186. monument lake resort americana festival — March 23, 2023 @ 6:21 am

  187. reusable face masks — March 23, 2023 @ 7:41 am

  188. cheapest storage units near me — March 23, 2023 @ 9:35 am

  189. clock Inserts videos — March 23, 2023 @ 10:48 am

  190. clock parts manufacturing — March 23, 2023 @ 12:57 pm

  191. jazz music festival — March 23, 2023 @ 1:52 pm

  192. promo products suppliers — March 23, 2023 @ 3:09 pm

  193. Learn More — March 23, 2023 @ 3:14 pm

  194. clock repair parts — March 23, 2023 @ 5:58 pm

  195. Best digital clocks — March 23, 2023 @ 8:53 pm

  196. parts of a clock — March 23, 2023 @ 9:30 pm

  197. mechanisms for clocks — March 23, 2023 @ 10:37 pm

  198. sync clocks for hospitals — March 24, 2023 @ 12:54 am

  199. this page — March 24, 2023 @ 2:11 am

  200. synchronazation communication systems — March 24, 2023 @ 4:33 am

  201. accessories for clocks — March 24, 2023 @ 5:39 am

  202. elapsed time clock for operating rooms — March 24, 2023 @ 8:31 am

  203. gas fireplace repairman near me — March 24, 2023 @ 9:48 am

  204. clocks for schools — March 24, 2023 @ 11:54 am

  205. clock accessories — March 24, 2023 @ 2:05 pm

  206. wireless clocks transmitter — March 24, 2023 @ 4:06 pm

  207. navigate to this website — March 24, 2023 @ 5:23 pm

  208. visit website here — March 24, 2023 @ 9:17 pm

  209. mechanisms for clocks — March 24, 2023 @ 9:31 pm

  210. synchronized clocks for stadiums — March 24, 2023 @ 11:29 pm

  211. fireplace maintenance — March 25, 2023 @ 12:46 am

  212. outdoor clocks for schools — March 25, 2023 @ 2:17 am

  213. great post to read — March 25, 2023 @ 4:57 am

  214. Learn More — March 25, 2023 @ 5:02 am

  215. DIY clock hands repair — March 25, 2023 @ 5:05 am

  216. fireplace repair services peoria — March 25, 2023 @ 8:18 am

  217. clocks for facilities — March 25, 2023 @ 9:32 am

  218. wireless time clocks — March 25, 2023 @ 2:41 pm

  219. fireplace repair service — March 25, 2023 @ 3:42 pm

  220. synchronized wireless time systems — March 25, 2023 @ 4:38 pm

  221. clock mechanisms — March 25, 2023 @ 7:49 pm

  222. clocks for facilities — March 25, 2023 @ 10:23 pm

  223. clock Inserts videos — March 26, 2023 @ 3:16 am

  224. accessories for clocks — March 26, 2023 @ 4:04 am

  225. wireless communication systems — March 26, 2023 @ 5:57 am

  226. PA systems for schools — March 26, 2023 @ 6:56 am

  227. fireplace repair service near me — March 26, 2023 @ 7:05 am

  228. time movement hands — March 26, 2023 @ 10:42 am

  229. more info — March 26, 2023 @ 1:22 pm

  230. hospital clock system — March 26, 2023 @ 2:14 pm

  231. wood stove repair peoria — March 26, 2023 @ 2:48 pm

  232. get more info here — March 26, 2023 @ 6:10 pm

  233. clock accessories — March 26, 2023 @ 6:53 pm

  234. outdoor clocks for hospitals — March 26, 2023 @ 8:59 pm

  235. fireplace repair services peoria — March 26, 2023 @ 10:16 pm

  236. clock building videos — March 27, 2023 @ 1:35 am

  237. clock movement — March 27, 2023 @ 2:16 am

  238. check it out here — March 27, 2023 @ 4:44 am

  239. useful reference — March 27, 2023 @ 5:50 am

  240. tub refinishing — March 27, 2023 @ 6:51 am

  241. clock Inserts videos — March 27, 2023 @ 9:05 am

  242. fireplace repair gas — March 27, 2023 @ 1:16 pm

  243. DIY clock hands repair — March 27, 2023 @ 3:28 pm

  244. mechanism for clocks — March 27, 2023 @ 4:00 pm

  245. clock hands repair — March 27, 2023 @ 5:22 pm

  246. wireless clocks transmitter — March 27, 2023 @ 7:05 pm

  247. fireplace maintenance service — March 27, 2023 @ 8:30 pm

  248. replacement parts for clocks — March 27, 2023 @ 11:32 pm

  249. accessories for clocks — March 28, 2023 @ 12:46 am

  250. outdoor clocks for schools — March 28, 2023 @ 2:29 am

  251. gas fireplace service & repair — March 28, 2023 @ 3:41 am

  252. how to build your own clock — March 28, 2023 @ 7:02 am

  253. metal clock mechanism — March 28, 2023 @ 7:04 am

  254. DIY clock replacement parts — March 28, 2023 @ 7:56 am

  255. los angeles bathtub reglazing — March 28, 2023 @ 10:55 am

  256. DIY clock hands repair — March 28, 2023 @ 2:35 pm

  257. clock mechanisms — March 28, 2023 @ 2:38 pm

  258. time synchronazation clocks — March 28, 2023 @ 5:04 pm

  259. countertop resurfacing — March 28, 2023 @ 5:55 pm

  260. gas fireplace repairman near me — March 28, 2023 @ 6:12 pm

  261. best hands for clocks — March 28, 2023 @ 10:07 pm

  262. best hands for clocks — March 28, 2023 @ 10:10 pm

  263. clock repair parts — March 28, 2023 @ 10:22 pm

  264. wireless products — March 29, 2023 @ 12:15 am

  265. tub reglazing los angeles — March 29, 2023 @ 12:50 am

  266. All Valley Fireplace Repair — March 29, 2023 @ 1:38 am

  267. best hands for clocks — March 29, 2023 @ 5:35 am

  268. clock making replacement parts — March 29, 2023 @ 5:39 am

  269. FCC wireless license — March 29, 2023 @ 7:25 am

  270. gas fireplace repair phoenix — March 29, 2023 @ 9:10 am

  271. parts of a clock — March 29, 2023 @ 12:44 pm

  272. metal clock hands — March 29, 2023 @ 1:07 pm

  273. bathtub refinishing los angeles ca — March 29, 2023 @ 2:35 pm

  274. clocks for businesses — March 29, 2023 @ 2:46 pm

RSS feed for comments on this post. TrackBack URI

Leave a comment

WordPress Themes