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Pollution Motivates Hope-Seeking Behavior: Sources of the Pollution-Gambling Link

In developing countries around the world, air pollution remains a serious issue which has possible unexpected influences on a variety of human decisions. Using a rich panel data structure with air quality observations at a daily frequency, we demonstrate a robust positive relationship between air pollution and lottery gambling and investigate the potential mechanisms for this relationship. Psychological influences account for a significant proportion of this positive relationship, as evidenced by a robust significant effect of reduced visibility conditions on lottery ticket purchases. However, chemical components of AQI (Air Quality Index) are also significantly responsible for the decision to purchase tickets, particularly sulfur dioxide (SO2), which suggests a larger impact of the early particulate formation process on human behavior than previously considered in most studies. We further show that limited attention to information about air quality levels is a significant factor, by identifying discontinuous jumps in lottery ticket purchases at government provided color-coded AQI transition thresholds around the “Moderate” or “Unhealthy” level, implying that the increase in ticket purchases is cognitively-driven. Finally, adverse regional economic conditions, namely the unemployment rate, significantly enhances the appeal of lotteries under polluted conditions. Altogether, our findings suggest a significant conscious appeal of lottery tickets as a hope-seeking device, providing ex-ante psychological health benefits under negative environmental conditions.