Wednesday, June 24, 2009

You’ve got to be in to waste your money

I don't know about you, but I've heard a lot of people talking up their chances in tonight's big lottery.

Here's a couple of things to think about before you start spending what you hope will be your winnings.

You have a similar chance of your ticket winning this draw as you do of drowning in the bath. Or being run over by a bus. But I don't see anybody spending time obsessing about possibilities like these.

In fact, the chances of your ticket winning in this lottery is something like 1 in sixty-million.  And since one-chance-in-a-very-large-number is a number very close to zero (and the larger the number the closer it is to zero), this means you have roughly the same chance of winning whether you have a ticket or not.

Interesting, no?

I know a lot of people who buy a Lotto ticket for a bit of “fun” – but I confess I’ve never quite understood where the “fun” comes in when you’re throwing away money you can’t really afford to lose.  And I know a few people for whom the “hope” of winning, however small, is the only hope they ever give themselves of turning their lives around -- the hope of some sort of escape that can be delivered without effort.  I confess I’d much rather see them exchange the uncertain “hope” of a winning Lotto ticket for the far more certain success of education, entrepreneurialism and hard work, but the seductive siren or reward without effort has them hooked.

But I’ve won something on Lotto.  Since Lotto started in 1985, I've probably won around $6000. I've "won" that by not spending five dollars a week buying a ticket.

How much have you "won."

16 Comments:

Anonymous Beehive said...

What's the difference in spending $25 for a bottle of reasonably good wine and $5 for a weekly lotto ticket? Is there any difference in the 2 type of spending according to Austrian's economic theory?

6/24/2009 10:56:00 am  
Anonymous LGM said...

With all the looto money I've not spent, I've been able to take up a new hobby! Yahoo!

BTW Looto is a tax on the stupidity of the gullible. Think on it.

LGM

6/24/2009 11:02:00 am  
Anonymous twr said...

The chances can't be one in sixty million, because they reckon they are going to sell about two million tickets for it, and they guarantee someone will win. So, the maximum odds are one in two million. Chances are multiple people (say 5-7 given the number of tickets and past splits) will win as they widen the criteria, so the odds are probably more like one in three or four hundred thousand.

6/24/2009 11:04:00 am  
Blogger Oswald Bastable said...

Its really about buying a few minutes of fantasy. Anyone with two brain cells to rub together knows they won't win- but they derive some small pleasure thinking about it for a bit.

For them its a voluntary tax & donation to charity.

For those who BELIEVE they will win- then it is a tax on the stupid!

6/24/2009 11:28:00 am  
Blogger Greig McGill said...

Another opinion:

Firstly, it's paying for a little bit of hope, and something to dream about. As long as you're aware of this, and aware of the odds against you, I don't see why anyone should be opposed to people buying tickets. So long as they're only spending their discretionary income, of course, and not spending your money (in the form of "entitlements").

Secondly, it's a fantastic form of taxation - a voluntary one! If only all tax was voluntary. Or better still, government spending was limited to what they could take voluntarily.

6/24/2009 11:30:00 am  
Blogger Greig McGill said...

Ha, Oswald. You beat me by a few seconds. :)

6/24/2009 11:31:00 am  
Blogger Crampton said...

Folks buying tickets are spending a small amount to enjoy the fantasy of what would happen in the very very low probability event of their ticket coming up.

In other words, it's pretty similar to voting except that it does less harm.

6/24/2009 11:54:00 am  
Anonymous Sus said...

"In other words, it's pretty similar to voting except that it does less harm."

:)

6/24/2009 11:56:00 am  
Blogger Comrade MOT said...

I think it would be a bit less than 1 in 60 million. It is one in however many tickets are sold, because someone has to win this week. Sixty million is a bit steep, it assumes that the average number of tickets per person is 15, which is quite a lot considering many people dont participate, and many are too young.

But in general I tend to agree though, it is a bit of a waste of money. I suppose the fact that someone will definitely win this week makes it seem a bit more real. The chances are low but not infinitely low.

6/24/2009 12:10:00 pm  
Blogger Comrade MOT said...

Sorry should be "1 in a bit less than 60 million".

6/24/2009 12:11:00 pm  
Blogger Craig Milmine said...

The odds of winning the Jackpot are 1 in 16,290,120 per line purchased.

6/24/2009 01:53:00 pm  
Anonymous James said...

Actually the real odds are 50/50.Either you win or you don't...simple.

;-0

6/24/2009 03:06:00 pm  
Blogger Philip said...

Someone HAS to win the jackpot prize this week, so you should be encouraging as many libertarians and rugged individualists to enter as possible to reduce the chance of an undeserving dole-bludger or beneficiary winning!

6/24/2009 03:17:00 pm  
Anonymous Robin Capper said...

Yes, it's a (nearly) pointless way to flush money down the drain in the remote hope of getting a little bit of pleasure in return for your "investment".

Just like owning/driving a MG I reckon :-)

6/25/2009 01:07:00 am  
Anonymous DenMT said...

"You have a similar chance of your ticket winning this draw as you do of drowning in the bath. Or being run over by a bus. But I don't see anybody spending time obsessing about possibilities like these."

You should talk to my girlfriend about flying in a plane...

DenMT

6/25/2009 02:34:00 am  
Blogger PC said...

"Just like owning/driving a MG I reckon."

Ooh, now that's harsh!

6/25/2009 08:21:00 am  

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