Refer to the \"In the News\" below: In the News: Perpetuating Poverty: Lotteries
ID: 1165205 • Letter: R
Question
Refer to the "In the News" below:
In the News: Perpetuating Poverty: Lotteries Prey on the Poor
A recently released Gallup survey confirms the fears of many who oppose government-promoted gambling: the poorest among us are contributing much more to lottery revenues than those with higher incomes. The poll found that people who played the lottery with an income of less than $20,000 annually spent an average of $46 per month on lottery tickets. That comes out to more than $550 per year, and it is nearly double the amount spent in any other income bracket.
The significance of this is magnified when we look deeper into the figures. Those with annual incomes ranging from $30,000 to $50,000 had the second-highest average—$24 per month, or $288 per year. A person making $20,000 spends three times as much on lottery tickets on average than does someone making $30,000. And keep in mind that these numbers represent average spending. For every one or two people who spend just a few bucks a year on lotteries, others spend thousands.
-Jordan Ballor
Source: Acton Institute, www.acton.org, March 3, 2004. Used with permission.
What percentage of income is spent on lottery tickets by
(a) A poor family with an income of $16,000 per year who purchase the average amount of lottery tickets for their income bracket?
Instructions: Enter your response rounded to two decimal places.
%
(b) An affluent family with an income of $35,000 per year who purchase the average amount of lottery tickets for their income bracket?
Instructions: Enter your response rounded to two decimal places.
%
Explanation / Answer
A.
Average monthly spend on lottery = $46
Annual spend on lottery = 12*46 = $552
% of income spent on lottery ticket = 552/16000
% of income spent on lottery ticket = 3.45%
B.
Annual spend on lottery = 12*24 = $288
% of income spent on lottery ticket = 288/35000
% of income spent on lottery ticket = .82%