Working Paper（24-019E）How Do Gamblers React to Wins? Evidence from Bank Transaction Data in Japan

This study investigates how gamblers change their gambling and consumption behaviors after receiving gambling wins. We use novel bank transaction data from Japan, which contain information on both gambling bets and wins from public horse races with precise timelines. The estimation results reveal a positive marginal propensity to gamble (MPG) and consume (MPC) immediately following a win, al- though these effects dissipate within 12 weeks. Despite considerable heterogeneity in gambling intensity, the MPG and MPC remain stable. Light gamblers display no significant difference from non-gamblers in their MPC for government transfers in 2020. While liquidity constraints influence the MPC, they have no impact on the MPG. Moreover, we find little evidence supporting the loss-chasing effect, as gamblers increase bets when they are net winners.

JEL Classification Number : E21, D12, G51, L83, E64

Keywords: income shock; problem gambling; marginal propensity to consume; heterogeneity