Sylvan Herskowitz

  • about
  • cv+contact
  • research
  • about
  • cv+contact
  • research
"Gambling, Saving, and Lumpy Liquidity Needs"
American Economic Journal: Applied Economics Vol 13, No.1, Jan 2021
 Main Paper, Final Ungated Version
herskowitz_betting_main_paper_012320.pdf
File Size: 792 kb
File Type: pdf
Download File

 Online Appendices
herskowitz_betting_appendices_012320.pdf
File Size: 3775 kb
File Type: pdf
Download File

​Abstract:
I present evidence that unmet liquidity needs for indivisible, “lumpy”, expenditures increase demand for betting as a second-best method of liquidity generation in the presence of financial constraints. With a sample of 1,708 sports bettors in Kampala, Uganda, I show that participants’ targeted payouts are linked to anticipated expenditures while winnings disproportionately increase lumpy expenditures. I show that a randomized savings treatment decreases demand for betting. And I use two lab-in-the-field experiments to show that unmet liquidity needs and saving ability are important mechanisms. These results cannot be explained by betting as a purely normal good.
s.herskowitz [at] cgiar [dot] org                                                                                                                                                      Copyright © 2016