Hunters like skewness, not risk: evidence of gambling behaviors in the Alaska hunting permit lottery

Abstract

In Alaska, hunting permits are distributed by traditional lottery. The absence of a preference point system means that applicants have little invested in their applications, and there are a variety of fallback hunting opportunities. Not unlike a jackpot-style state lottery, the cost to play is low relative to the potential prize winnings. These factors may cause risk-averse or risk-neutral individuals to exhibit a preference for positive skewness in their bets. Analysis in this paper is focused on four prevalent game species: moose, dall sheep, mountain goat, and bison. Pooled Ordinary Least Squares regression models were constructed to predict permit application levels as a function of various hunt characteristics, qualities, and restrictions. Permit descriptions are provided to applicants in a published document called the drawing supplement, which is the primary source of data for this study. Additional hunter-reported data is obtained from the Alaska Department of Fish and Game website. A comparison of calculated permit values and private ranch hunting opportunities validates many of the observations drawn from the models. Permit values are also used to fit a cubic model of bettor utility. Even when awarded prizes are not monetary, applicants exhibit a preference for positive skewness and aversion from risk that is typically associated with gambling.