Lottery - a tax on stupid people? Maybe not...

There's a saying that lottery is a tax on stupid people. At first glance, that's absolutely true, as statistically, the expected return of a lottery ticket is lower than the cost of a lottery ticket. If this wasn't the case, no organisation would run a lottery.

However, perhaps things are not a straightforward as it seems. Recall that money should never be seen as a goal - money is a tool for obtaining the experiences you want and living your life the way you desire. In this case, perhaps looking at the psychological cost and return (happiness) is the right way to see it.

I suspect that for most people (who are not millionaires), if one produced a graph of psychological cost on the y axis, and financial cost on the x, the graph would like something like a polynomial or exponential function, or perhaps an S-curve if one looks far enough. This means that the psychological expected value is higher than the psychological cost of purchasing a ticket. Another way to look at it is - if this was not the case, we wouldn't be buying the lottery tickets anyway.

Then again, maybe people are just bad at intuitively understanding odds at such low probabilities, and lottery really is a tax on idiots. In any case, I don't think the answer is that straightforward, there are definitely good reasons both for and against purchasing lottery tickets, and I still haven't decided if I should or not. For now, I'll give it a pass, but I will continue to ponder what the implications are.