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"Spatial Probit and the Geographic Patterns of State Lotteries"
by Cletus C. Coughlin, Thomas A. Garrett, and Rubén Hernández-Murillo

We implement a spatial probit model to differentiate states with a lottery from those without a lottery. Our analysis extends the basic spatial probit model by allowing spatial dependence to vary across geographic regions. We also separate the spatial effects of neighbors versus non-neighbors. The methodology provides consistent and efficient coefficient estimation in light of the simultaneity in spatial dependence. We find evidence of spatial dependence and spatial heterogeneity in lottery usage, and we find that spatial patterns differ significantly by geographic region. The importance of spatial dependence in state lottery usage suggests the need to consider spatial effects in empirical models examining the use of any policy tool by subnational governmental units.

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Category > Applied Econometrics
Category > Applied Microeconomics
Category > Regional Economics
Author > Cletus C. Coughlin
Author > Thomas A. Garrett
Author > Rubén Hernández-Murillo
Research Papers and Publications: JEL Code > H71
Research Papers and Publications: JEL Code > H72
Research Papers and Publications: JEL Code > H73
Research Papers and Publications: JEL Code > C21
Research Papers and Publications: JEL Code > C25
Research Papers and Publications: JEL Code > R12


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