Sunday, 27 December 2009

The Lottery 18th Century Style

In spite of having lost money on previous lottery tickets, Thomas has not quite given up hope

7 February 1759 Bout a Tickett of Mr Geo Ayscough before the lottery begun Drawing No 3m726 I gave for it £12:3:0 it come up Blank and I sold the Blank for £5:5:0 so I am out of Pockitt £6.18s

Why would anyone buy the blank? Can anyone enlighten me?

2 comments:

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  2. This is complicated, but here goes:
    Eighteenth-century lotteries were a form of revenue raising by the government. Tickets, usually denominated in £10 units, were like government bonds, which paid interest: they could be bought and sold on the market for stocks and other financial instruments from stock jobbers, and were priced flexibly, so they could be bought or sold above or below their face value. In the lottery, a small percentage (like one in ten) of these tickets would win the lottery, and pay interest at a much higher rate, such as three times the base rate. The ticket could then be sold on the stocks market for a much higher price than it was purchased for. Thomas's blank, though, sells for the going price for blanks, as it pays interest at a much lower rate.
    M

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