Neil Irwin writes at the NYT that financially literate people like to complain that buying lottery tickets is among the silliest decisions a person could make but there are a couple of dimensions that these tut-tutted warnings miss, perhaps fueled by a class divide between those who commonly buy lottery tickets and those who choose to throw away money on other things like expensive wine or mansions. According to Irwin, as long as you think about the purchase of lottery tickets the right way — purely a consumption good, not an investment — it can be a completely rational decision. "Fantasizing about what you would do if you suddenly encountered great wealth is fun, and it is more fun if there some chance, however minuscule, that it could happen," says Irwin. "The $2 price for a ticket is a relatively small one to pay for the enjoyment of thinking through how you might organize your life differently if you had all those millions."
Right now the Multi-State Lottery Association estimates the chances of winning the grand prize at about 1 in 175 million, and the cash value of the prize at $337.8 million. The simplest math points to that $2 ticket having an expected value of about $1.93 so while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot. "I am the type of financial decision-maker who tracks bond and currency markets and builds elaborate spreadsheets to simulate outcomes of various retirement savings strategies," says Irwin. "I can easily afford to spend a few dollars on a Powerball ticket. Time to head to the convenience store and do just that."
(Score: 5, Interesting) by Covalent on Friday February 13 2015, @12:20AM
I understand the math. I understand the odds. I understand it's just an idiot tax.
But I have now wasted $2 of my hard-earned money on a useless piece of paper.
Why? Chalk it up to a terrible day at work, living in brutally cold Michigan, and the fact that I had to buy something at a drug store anyway. My daughters were delighted to hear about the tutors they would have on our yacht. About how they would be studying ancient Egypt...IN Egypt. And about how there would be tickets to the space station waiting for them, whenever we get around to building one for tourists.
In the end, it was worth the $2...once. Now I have to work just a little harder to make sure at least some of that fantasy can become a reality.
You can't rationally argue somebody out of a position they didn't rationally get into.
(Score: 2, Insightful) by Anonymous Coward on Friday February 13 2015, @12:59AM
So you rented some hope for a few days for $2. You could have spent it on a beer, or a cup of coffee (or part of a cup of coffee depending on your barista of choice), on a new pair of shoelaces, on part of a ream of printer paper, a candy bar or two, etc, etc. Sometimes some hope or a dream satisfies your needs better than many of the alternatives (not as much as a beer, of course, because we're not talking about a $2 bottle with a genie in it).
(Score: 5, Funny) by Anonymous Coward on Friday February 13 2015, @01:16AM
> the tutors they would have on our yacht
You are part of the imaginary 1%. Torches and pitchforks everyone.
(Score: 2) by tangomargarine on Friday February 13 2015, @07:20AM
"Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"
(Score: 2) by maxwell demon on Friday February 13 2015, @07:46AM
.01+i would be complex, but not imaginary (it has an imaginary part, though).
The Tao of math: The numbers you can count are not the real numbers.
(Score: 0) by Anonymous Coward on Friday February 13 2015, @02:28AM
Well I bought tickets, just like I do every time the amount gets high enough that someone at work recommends a pool. Its like my co worker said. Its cheap insurance that I wont be the only one here when the rest of you strike it rich.
(Score: 3, Funny) by c0lo on Friday February 13 2015, @09:06AM
(says somebody wasting her/his time posting on SN)
(don't shoot, I'm just kidding)