Lotteries

Originally posted by AThousandYoung
I won $300 on a scratcher once. I've never in my life saved up $300 one dollar at a time. Have you?

Not a dollar at a time, but I do it 1-99 cents per day for the past 9 or so years.

Every day I put the change I get from breaking dollars in a coffee tin. At the end of about a year I have almost $300 that I deposit into my bank.

It doesn't take any discipline at all really. Just having a piggy bank that gradually gets full.

I also have no illusions of getting rich by doing this, but it's something to do with the change that tends to accumulate.

Now that I think of it, given $300 saved for 9 years, that means over the past 9 years I've put about $2,700 in my bank account from doing that - not including interest accumulated. That's about $2700 more than I would have if I put that money into the lottery.

Originally posted by AThousandYoung
That model fails to account for opportunity cost. Those without self discipline will face different opportunity costs than those who have it. To a typical undisciplined person, the opportunity cost of buying lotto tickets isn't very high - not nearly as high as the mathematical analysis assumes.

That just suggests that they might as well just throw it away one way over another.

The opportunity cost does not change the chance (or lack thereof) of winning.

I can see your point that it is marginally better to buy a lottery ticket with a dollar than to burn it, but that margin isn't all that high.