When you work for 7.75 an hour to support a family, you don't have enough money to "manage," much less gamble or buy jewelry. That's what it means to be working poor. I don't think you could hack that.
The main value one receives from buying a lottery ticket is not the statistical expected value of return on investment, but the sense of hope for a better life that you get when you but the ticket. This hope is much more valuable for someone struggling with poverty than for someone who's relatively well off.
Therefore, it's perfectly rational for poor people to put a higher dollar value on a lottery ticket.
His point wasn't that it was funny, it was that the parent was making a poor argument. And he's right. If you spend any time at all around people working low/minimum wage jobs, you'll see that many of them spend money on non-essential things: alcohol, tobacco, lottery tickets, drugs, expensive cell phones, renting stereos and TVs, etc.
My mom spent many years working with low-income families as a social worker. She told me repeatedly that many of these families just lack the basic skills of managing money. If they had $40 a week left after paying all their bills, they see nothing wrong with spending $30 of that on cigarettes and beer.
Yeah, if they took that $40 / week and invested it in an index fund with a 7% after-expenses return, then after 47 years of working from age 18 through age 65, they'd have an inflation-adjusted $185,000. Combined with Social Security, that would provide them almost $20,000 / year to retire on.
But humans aren't just satisfied with being alive. They all have hopes and dreams; they have needs, sure, but also wants. We need food but we also need some pride. It may not make sense to you, it may not seem logical, but it's human. Lottery tickets are a way to have hope: that it's going to be ok one day, better than ok. A smart phone says, I may be cleaning toilets but that's not who I am.
If you spent a year or more working a minimum wage job and living off of it, you too would start to do some of this. It's just human nature.
The problem with poverty is often not that you have no excess income, but that you have so little (or should have none, but sacrifice some food to have some) that you're exhausted and can't help but want what little luxury you can afford.
It's easy to say that if someone was better disciplined they could save what little extra they have and make something of it in the long run, but it's very different to actually be in that situation and have the resolve to do that.
You can be smart enough to know you're being irresponsible and keep doing it, which just makes it that much more painful, but many aren't even smart enough to be aware of this.
This does not mean that giving people in this situation additional means would always be a total waste; often, people just want/need a certain baseline, and beyond that will use additional means to lift themselves up.
Sure, these are common values. But damaging values. When people learn to defer things for future gains, they get the chance to improve their lot in life, or the lot of their children. But blowing it all on lotto tickets with a pack of cigs and a forty isn't doing anyone any good.
