Research has shown even regular lottery players tend to have a poor sense of the probabilities of winning, he said. Illustration / Andrew Louis
By RNZ
The lure of big lottery jackpots is due to people being poor at assessing probabilities, says a psychology professor.
Dr Marc Wilson of Victoria University told RNZ’s Sunday Morning the increased ticket sales Lotto NZ reported ahead of Saturday night’s $50 million Powerball draw were a common finding across the world.
“We tend to see that there’s a proportional increase in the number of tickets sold when there’s a rollover jackpot.”
This was because research had shown even regular lottery players tend to have a poor sense of the probabilities of winning, he said.
Even those who did understand the probabilities often discounted them, “in part because numbers that large are things that we’re not particularly well-evolved to deal with”.
Research by Daniel Kahneman and Amos Tversky - which led to the former being awarded the Nobel Memorial Prize in Economic Sciences in 2002 - had shown people were “much more likely to go for a single massive prize” than the possibility or sure likelihood of a smaller one, Wilson said.
“What we know is that people tend to be biased more towards absolutely large numbers than higher probabilities of winning smaller ones.”
For regular lottery players, the money they had spent on tickets in the past could also lead to them overestimating the likelihood they would win.
“If we’re regular lottery players we have a sunk cost, so we’ve played this every week for however many years [and] we’ve spent an awful lot of money on this - therefore it must be our time coming up soon.”
That sense of being “due” a win was even stronger when people used the same numbers each week, he said.
News of big lottery wins also tended to make people think the probability of hitting the jackpot themselves was higher than it actually was.
“Things that we can bring to mind more easily tend to feel as if they’re more immediate, more frequent, so the relatively few big wins that we hear about are much more salient than the hundreds of thousands of losses that we never hear about.”
While a large lottery win would be life-changing for most people, there was no guarantee it would bring long-term happiness, Wilson said.
“Happiness, based on what we know about it, is something that has at least three different determinants.”
Genetics set a person’s baseline with regard to happiness, he said.
How individuals chose to view the world - in a negative or a positive light - and the impact of things happening to a person in a given moment were the other factors at play, though the latter accounted for only around 10 per cent of their general happiness.
“So if you win lotteries, what the research shows is you’re briefly going to be really, really happy, but after about a year you’re going to return back to that genetic baseline.”
Lottery winners also tended to self-report an improvement in their mental wellbeing, but not necessarily an improvement in their physical health.
That was a little paradoxical, Wilson said, because generally speaking, when people felt physically healthy they tended to feel more mentally healthy as well, and vice versa.
He suspected the sense of mental wellbeing following a big lottery win could be due to another factor - the ability for winners to help others, should they choose to do so.
Wilson recalled a journalist asking Sir John Key, when he was Prime Minister, what it was like to be rich.
“His answer stuck with me. He said, ‘Well, it means that if the car breaks down, I’m not gonna lie awake at night worrying about how to pay for it, and if someone who I care about needs a bit of cash, I can actually help them out.’
“I think there’s a lesson in that, which is … [money] takes away some of the everyday stresses, and it does mean that you’re able to actually make a contribution.”
- RNZ
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