In the University labs, we have used Beta-galactosidase as a reporter gene to quantify the expression initiated by the stress-response promoter in yeast. This was done by exposing one of the two groups to osmotic stress (high salt concentration) whilst the other was unstressed. Then the levels of beta-galactosidase were compared. A question given to us afterwards asked to give advantages & disadvantages of using Beta-galactosidase compared to Luciferase as a reporter gene in this experiment. And which one would be, overall, more suitable?
Beta-galactosidase (B-gal for short) is an enzyme that will process the substrate lactose. In applications using B-gal as a reporter (lacZ gene), two lactose analogues are commonly used: X-gal or ONPG (as pointed out by @Alan Boyd). Both substrates are colourless, becoming coloured once hydrolyzed by B-gal. The formation of this colour allows B-gal to be assayed by means of either visual inspection, or more accurate means by using a spectrophotometer or camera.
When X-Gal is hydrolyzed, an insoluble blue dye is formed. Evolution of blue colour is intensified as more substrate is hyrolyzed, allowing for quick blue/white screening by visual inspection in common applications of cloning and gene expression. Using the X-gal substrate, B-gal assays are more sensitive to gene expression (the dye precipitates out and retains colour very well), however X-gal is not quantitative (Möckli & Auerbach. BioTechniques 36:872-876 (May 2004)). In contrast, ONPG hydrolysis evolves a soluble yellow dye. This colour developement is quantitative, however is less senstive than X-gal because the linear relationship betwen light absorption (at 420 nm) and substrate concentration is small. Using ONPG as a B-gal substrate allows for quantitative measurement of B-gal activity (and therefore promoter activity). (Note that ONPG itself is not capable of inducing the lac promotor, unlike X-gal.)
Luciferase reporters (there are actually a few different luc genes) operate in a similar fashion. The enzyme cleaves its substrate, however instead of yielding an insoluble blue dye, emits a characteristic photon. Luciferase activity must be measured using specialized camera hardware to detect and count photons emitted from your yeast clones. This assay will still answer yes/no reporter questions, but can also be quantified to look at how much the reporter was activated. Luciferase activity is a quantitative reporter while also yielding spatiotemporal information.
The choice of reporters depends largely on the question you wish to answer. If promoter induction is relevant (eg, the stress-response promoter was activated), then luciferase or B-gal with X-gal are best suited for their higher sensitivity. Given that luciferase requires a special camera and optical filter (such as a gel documentation system), X-gal is ideal because it may be screened by eye. If promoter activity is being assayed, then B-gal+ONPG or luciferase will yield quantitative measurements of reporter gene activity, and require at least a spectrophotometer.
Given these are university labs, I assume that materials costs are to be minimized and ease of experimental protocol to be maximized, B-gal is the ideal reporter. Luciferase requires: more costly substrate; specialized equipment; careful handling of materials, and more time (as screening necessarily takes longer, therefore lower throughput for a lab demo setting).
I realize this question is about yeast, but I'm afraid that people may try to expand the answer to all systems, and beta galactosidase is not good for all systems, particularly for animal studies. I've seen too many gene therapy papers try to get away with using it.
Beta galactosidase is not a good reporter gene for in vivo gene delivery studies. There is too much endogenous activity in most tissues to distinguish the exogenous activity. When doing non viral gene delivery, the amount of DNA expressed is often so low that you cannot overwhelm the endogenous activity and therefore cannot conclusively say the enzyme activity you detected is from your new DNA.
Luciferase is far superior for in vivo work. First, there is no endogenous luciferase activity in most animals ( you're out of luck if you're doing work on fireflies ) so you can be sure that any luciferase activity you detect is real. Luciferase activity can be determined noninvasively though bioluminescent imaging, allowing for repeated measurements on the same animal. Beta glucosidase can require killing the animal, dissecting the tissues, preparing microscope slides, and then analysis, so doing a time course study will require using many more animals.
The only advantage I can see beta glucosidase having over luciferase is if you want to see what percentage or precisely what type of cells are expressing the reporter gene. However, I think GFP or another fluorescent protein would be more appropriate because of the endogenous activity issue I described earlier.
Again, my answer applies for animal use. If you're just growing yeast on a plate, the beta galactosidase is probably the cheaper way to go. We did some 384 and 1536 well plate assays on primary hepatocytes with luciferase, and the luciferase reagent was about $250 for 10mL. You might also consider fluorescent proteins for screening. I've made bactieral colonies with RFP that were visibly red, so no need for UV, but even if you need UV light to see the fluorescence, a standard UV transluminator for viewing gels will be good enough, and no extra reagents to add.
I think that @leonardo has this backwards. β-galactosidase can be assayed accurately and cheaply using ONPG as a colorimetric substrate with no solubility problems. All that is needed is a spectrophotometer: my guess is that this is the assay the OP used in their experiment. So my answer is - use β-galactosidase for inexpensive quantitative analysis - no need to add luciferin and ATP or to worry about oxygen availability. I'm struggling to think of a disadvantage for β-galacosidase - maybe there are higher background levels from other cellular glycosidases, whereas there will be no background luciferase activity?