Certainly, if you happen to be one of three people—in North Carolina, Puerto Rico or Texas—throwing down $2 at some point over the last few days was a very, very good idea indeed. For the rest of us, the argument is somewhat harder to make. That doesn’t faze the Times’ Neil Irwin, although, in fairness, he made his case yesterday, before 11, 13, 25, 39 , 54 and 19 made the aforementioned three people America’s newest hundreds-of-millionaires.
Irwin’s case boils down to the following: It’s fun to fantasize, but it’s hard to suspend sufficient disbelief to fantasize about what you’d do with a half-billion dollars without actually having the one-in-175-million chance of winning said half-billion, and those fantasies might actually teach you a thing or two about what you should be doing with your life; it’s no stupider than pissing your money away on other ephemeral pleasures like six-figure bottles of champagne; and math.
The simplest math points to that $2 ticket having an expected value of about $1.93. It’s actually more complicated than that, because that calculation doesn’t account for the fact that there could be multiple jackpot winners who must split the pot. And it doesn’t account for the income tax you will owe on any winnings.
But the key intuition is that while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot.
The Case for Buying a Powerball Ticket [NYT The Upshot blog]
Winning Powerball tickets sold in North Carolina, Puerto Rico and Texas [WaPo]