Monthly average lottery spending among the bottom 20% of income earners rose 60% over the past year. Even as the stock market enjoys a boom, low-income households with no capacity to invest are dreaming of life-changing windfalls with extremely low odds.
According to data from the Korean Statistical Information Service (KOSIS) on Wednesday, monthly average lottery spending by households in the bottom 20% of income earners (the first quintile) stood at 428 won, up 60.8% from a year earlier. By contrast, lottery spending fell 15.4% among the middle class (third quintile) and 21.2% among high-income earners (fifth quintile). The rise in lottery consumption is a phenomenon limited to low-income households.
As pressure from essential spending intensified, low-income households first cut back on discretionary goods. Spending on alcohol by first-quintile households fell 9.0% to 6,974 won, while spending on tobacco dropped 11.8% to 14,843 won.
By contrast, unavoidable costs rose steeply. Spending on food and non-alcoholic beverages increased 3.3% to 238,614 won, while actual housing costs rose 6.6% to 114,509 won. Loan interest costs also surged 23.9% to 24,339 won.
The problem is that income has not kept pace. In the first quarter of this year, the monthly average real income of first-quintile households was 988,214 won, rising just 0.6%. Over the same period, household expenditure rose 4.9% and consumption expenditure rose 5.1%.
The result is a widening deficit. In the first quarter of this year, the monthly average deficit for first-quintile households reached 438,174 won, the largest since 2019. The burden of prolonged high inflation and high interest rates is concentrated on low-income households.
Amid this situation, lottery demand rose conversely. The more difficult life becomes and the less money people have, the more the lottery — which offers the prospect of a large return for a minimal cost — serves as psychological comfort.
Experts view buying lottery tickets while cutting back even on alcohol and tobacco as reflecting a mindset of not letting go of hope for the future, despite difficult circumstances. They analyze it as consumption behavior aimed at maintaining the expectation of being able to get back on one's feet even amid continuing deficits. The explanation is that semiconductor stocks and others leading the recent stock market rally are difficult to access at low-income earners' income levels, so the lottery is chosen as a substitute.
The reality that the stock market boom is not for everyone has been revealed through rising lottery demand. In the face of investment opportunities, low-income households are excluded from the start, and the only option left is the lottery.
