"Struggling Even With Living Expenses, Let Alone Stocks"... Lottery Spending Surges 60% Among Low-Income Households Seeking a Turnaround

Alcohol and Cigarette Spending Down, Lottery Purchases Up 60%
Lottery Spending Decreases Among Middle- and High-Income Groups
Monthly Deficit Reaches 430,000 Won, Highest Since 2019

Over the shoulder of a citizen combining lottery numbers, the phrase "You Are This Week’s Winner" is visible. Photo by Moon Honam

Amid prolonged high inflation and interest rates, low-income households are facing greater financial burdens and reduced spending capacity. However, so-called "recessionary consumption" such as lottery purchases has actually increased. While spending on food, housing, and loan interest has risen, expenditures on alcohol and tobacco have declined. By contrast, spending on lotteries, which offer the hope of large returns for a small amount of money, has grown significantly.

According to data from the Korean Statistical Information Service (KOSIS), in the first quarter of this year, the average monthly lottery spending by households in the lowest 20% income bracket (first quintile) was 428 won, up 60.8% from the same period last year.

In contrast, lottery consumption among middle- and high-income households decreased. During the same period, households in the third quintile spent 855 won on lotteries, a decrease of 15.4%. Households in the fifth quintile spent 745 won, down 21.2%. The increase in lottery purchases has been concentrated among low-income households.

Typically, as living conditions worsen, people tend to cut back on dining out and leisure spending, while increasing lottery purchases in hopes of a big reward for a small outlay. In reality, low-income households have reduced their consumption of discretionary items. In the first quarter of this year, households in the first quintile spent 6,974 won on alcohol, down 9.0% from a year earlier, and 14,843 won on tobacco, a decrease of 11.8%.

On the other hand, essential expenditures increased sharply. Spending on food and non-alcoholic beverages rose by 3.3% to 238,614 won, and actual housing costs rose by 6.6% to 114,509 won. Interest expenses on home mortgages, credit loans, and similar debt surged 23.9% to 24,339 won.

The rate of income growth failed to keep pace with rising expenditures. In the first quarter of this year, the average monthly real income for first-quintile households increased by only 0.6% year-on-year to 988,214 won. In contrast, household expenditures rose by 4.9% to 1,426,387 won, and consumption expenditures increased by 5.1% to 1,230,510 won.

As a result, the size of the deficit also grew. In the first quarter of this year, the average monthly deficit for first-quintile households reached 438,174 won, the largest since 2019. This indicates that the pressure from high inflation and an economic slowdown is being concentrated on low-income households.

A citizen is marking numbers on a lottery ticket. Photo by Mohnam Moon

'Hope Psychology' Driven by Feeling Left Out of Asset Markets

Experts analyze that the increase in lottery consumption is not simply a matter of gambling, but rather a psychological phenomenon arising from economic pressure.

Lee Eunhee, a professor of consumer studies at Inha University, stated, "The fact that people are cutting back even on alcohol and tobacco but still buying lotteries reflects a psychology of maintaining hope for the future amid difficult realities," adding, "Even in a situation of ongoing deficits, this is a pattern of consumption that expresses the expectation that one can recover."

The recent stock market boom is also cited as a background factor for the rise in lottery consumption. Although investor enthusiasm continues due to the rise of the KOSPI and strong semiconductor stocks, low-income households lack the financial means to benefit from asset market gains.

Kim Sangbong, a professor of economics at Hansung University, said, "Recently, semiconductor stocks and other assets driving the stock market rally are not easily accessible to low-income households," adding, "For those who have difficulty finding investment opportunities, there is a tendency to turn to lotteries, which offer participation at relatively low cost."

This content was produced with the assistance of AI translation services.