Even so often, one of the NZ lottery jackpots gets to be unusually large and we see an increasing stream of search engine hits from people looking for ways to win.
Via @mapcaptenor, here’s an analysis of the USA’s Powerball lottery, with the conclusion
The one sentence takeaway: no matter how big the jackpot gets, you should only buy Powerball tickets for their entertainment value.
In fact, an economics argument can get you this conclusion much more easily. All the facts you have about the lottery are available to pretty much anyone in the country, as is the opportunity to buy tickets. Unless you think you are one of the top handful of smartest investors in New Zealand, you should assume that other people will draw the same conclusion as you about whether it’s worth buying tickets. If you think it’s worth buying, so will quite a lot of other people, and collectively you’ll buy up enough tickets to ensure that the expected benefit falls to nearly zero.
Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »