ERIC Number: EJ766211
Record Type: Journal
Publication Date: 2005
Pages: 22
Abstractor: Author
ISBN: N/A
ISSN: ISSN-0098-9495
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Available Date: N/A
Earmarked Lottery Profits: A Good Bet for Education Finance?
Novarro, Neva K.
Journal of Education Finance, v31 n1 p23-44 Sum 2005
This article studies the effects of earmarking state lottery profits for education. Because educational expenditures generally exceed the funds earmarked for education by a wide margin, nothing prevents state legislators from using earmarked funds to replace rather than augment funds that would have gone to education in the absence of earmarking. Conventional economic reasoning therefore implies that this policy should have no effect on overall educational spending. However, this study found that $1 of lottery profits earmarked for education increases current educational spending by roughly $0.79, whereas a nonearmarked dollar of lottery profits increases educational spending by only $0.43. Furthermore, the hypothesis that a dollar of profits specifically earmarked for noneducational uses has no effect on educational expenditures cannot be rejected. States that operate lotteries may want to reassess their existing legislation regarding the use of lottery proceeds given the economic implications of their earmarking policies. (Contains 21 footnotes, 4 tables, and 1 figure.)
Descriptors: Expenditures, Educational Finance, Funding Formulas, Resource Allocation, Budgeting, Economic Impact, Game Theory, State Legislation, State Surveys, Policy Analysis, Politics of Education, Research Methodology, Operations Research
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Publication Type: Journal Articles; Reports - Research
Education Level: N/A
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Language: English
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