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Lottery preference and stock market participation: evidence from China

Tingting Zhang (School of Economics, Hainan University, Haikou, China)
Desheng Wei (School of Finance, Southwestern University of Finance and Economics, Chengdu, China)
Zhifeng Liu (Management School, Hainan University, Haikou, China)
Xihao Wu (Management School, Hainan University, Haikou, China)

China Finance Review International

ISSN: 2044-1398

Article publication date: 15 June 2021

Issue publication date: 6 February 2023




This paper studies the effects of lottery preference on stock market participation at the macro level.


The authors use the abnormal search volume intensity for lottery-related keywords from the Baidu search engine to capture retail investors' lottery preference. To measure stock market participation, they use five different macro-level measures from various angles. They perform the time series regression analysis in their empirical study.


First, the validation tests show that the lottery preference index in this study is reasonable. Further, the authors find that lottery preference increases people's propensity to enter and trade in the stock market. Besides, they find that the effect on trading behavior is asymmetric, that is, high lottery preference has a more significant impact on trading behavior than low lottery preference. However, lottery preference has no significant effect on the stockholding.


This paper contributes to the growing literature that examines the determinants of stock market participation and the role of lottery/gambling preference in the financial market. It also provides direct and novel evidence for Statman's (2002) conclusions about the similarity of lottery players and stock traders.



Conflict of Interest: The authors declare that they have no conflict of interest.

This research was supported by the National Natural Science Foundation of China (71861008, 72062012), and the Natural Science Foundation of Hainan Province (2019RC151).


Zhang, T., Wei, D., Liu, Z. and Wu, X. (2023), "Lottery preference and stock market participation: evidence from China", China Finance Review International, Vol. 13 No. 1, pp. 46-62.



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