IQ and Gambling Consumption: An Analysis of Horse Race Betting Participation and Expenditure Using Individual-Level Data

Session Title

Session 2-3-D: Gambling Behavior

Presenters

Niko Suhonen, University of Eastern Finland
Tuomo Kainulainen, University of Eastern Finland
Jani SaastamoinenFollow
David Forrest Prof., University of Liverpool

Presentation Type

Event

Location

Caesars Palace, Las Vegas, Nevada

Start Date

29-5-2019 1:45 PM

End Date

29-5-2019 3:10 PM

Disciplines

Economics

Abstract

Abstract

Recent literature suggests that intelligence is positively associated with economic outcomes involving risky decisions such as investment portfolio returns (Grinblatt et al. 2012). Gambling is a form of entertainment in which consumers buy risky products with negative expected values. However, the relationship between intelligence and gambling consumption is not understood yet. We use a unique individual-level data set from Finland to investigate how intelligence predicts gambling participation and expenditure. Our data consists of betting data from a monopoly horse race betting operator (betting participation and expenditure on betting), background information on the Finnish adult population from Statistics Finland (e.g. personal income, socio-economic status), and data on intelligence quotient (IQ) tests administered to conscripts by the Finnish Defence Forces (test scores for the mathematical, visuospatial and verbal measures of IQ). Our results suggest that a high IQ is positively associated with betting participation and the expenditure on betting. However, inspecting the three measures of IQ separately suggests that the mathematical IQ drives the positive relation between gambling and intelligence. In contrast, the visuospatial and verbal IQ are negatively associated with gambling participation and expenditure.

Implications statement

This paper provides novel information on how gambling consumption is associated with the consumer’s socioeconomic background and intelligence.

Keywords

intelligence, individual-level data, gambling expenditure, gambling participation, consumer behavior, horse race betting

Author Bios

Jani Saastamoinen (UEF) is an applied economist who has contributed to various streams of literature in the fields of business administration and economic sciences. He has published gambling-related research in journals such as Management Science, Economics Letters, Empirical Economics and Psychiatry Research.

Niko Suhonen (UEF) is a behavioral economist specializing in gambling research. His research has een published in journals such as Management Science, Computers in Human Behavior, Economics Letters, Empirical Economics, Journal of Gambling Studies and Psychiatry Research.

M.Soc.Sc. Tuomo Kainulainen (UEF) is a Ph.D. student. His dissertation concerns gambling problems and empirical measurement of betting. He has recently published gambling-related research in International Gambling Studies and Economics Letters.

Professor David Forrest is an applied economist and econometrician who has contributed substantially to the literature of sports and gambling markets. He regularly appears as an expert in media in the UK. He currently serves as a member of the Responsible Gambling Strategy Board (of Great Britain).

Funding Sources

This research project has received funding from Emil Aaltonen Foundation and the Finnish Foundation for Alcohol Studies. the funding bodies had no involvement in any aspects of the research including, not limited to, the research questions, methodology, research conduct, or analysis of results.

Competing Interests

Tuomo Kainulainen has received funding for unrelated research projects from the Finnish Foundation for Alcohol Studies and the Finnish Foundation for Business Education. He has also received funding from the Finnish Foundation for Alcohol Studies for this research. None of these organisations has had any input into the project reported in the present paper. David Forrest has received funding for unrelated research projects from GambleAware (a UK charity) and the American Gaming Association. As a member of the Responsible Gambling Strategy Board, he has received fees from the Gambling Commission (Great Britain). None of these organisations has had any input into the project reported in the present paper. Jani Saastamoinen has no competing interests. Niko Suhonen has no competing interests.