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Happy Lottery Winners and Lottery‐Ticket Bias

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  • Seonghoon Kim
  • Andrew J. Oswald

Abstract

The world spends a remarkable $250 billion a year on lottery tickets. Yet, perplexingly, it has proved difficult for social scientists to show that lottery windfalls actually make people happier. This is the famous and still unresolved paradox due initially to Brickman and colleagues. Here we describe an underlying weakness that has affected the research area, and explain the concept of lottery‐ticket bias (LT bias), which stems from unobservable lottery spending. We then collect new data—in the world’s most intense lottery‐playing nation, Singapore—on the amount that people spend on lottery tickets (n = 5626). We demonstrate that, once we correct for LT bias, a lottery windfall is predictive of a substantial improvement in happiness and well‐being.

Suggested Citation

  • Seonghoon Kim & Andrew J. Oswald, 2021. "Happy Lottery Winners and Lottery‐Ticket Bias," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 317-333, June.
    • Handle: RePEc:bla:revinw:v:67:y:2021:i:2:p:317-333
    DOI: 10.1111/roiw.12469
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    References listed on IDEAS

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    2. Adriana Lleras‐Muney, 2022. "Education and income gradients in longevity: The role of policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(1), pages 5-37, February.

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