IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v93y2011i3p961-969.html
   My bibliography  Save this article

The Ticket to Easy Street? The Financial Consequences of Winning the Lottery

Author

Listed:
  • Scott Hankins

    (University of Kentucky)

  • Mark Hoekstra

    (University of Pittsburgh)

  • Paige Marta Skiba

    (Vanderbilt University)

Abstract

This paper examines whether giving large cash transfers to financially distressed people causes them to avoid bankruptcy. A comparison of Florida Lottery winners who randomly received $50,000 to $150,000 to small winners indicates that such transfers only postpone bankruptcy rather than prevent it, a result inconsistent with the negative shock model of bankruptcy. Furthermore, the large winners who subsequently filed for bankruptcy had similar net assets and unsecured debt as small winners. Thus, our findings suggest that skepticism regarding the long-term impact of cash transfers may be warranted. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Scott Hankins & Mark Hoekstra & Paige Marta Skiba, 2011. "The Ticket to Easy Street? The Financial Consequences of Winning the Lottery," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 961-969, August.
  • Handle: RePEc:tpr:restat:v:93:y:2011:i:3:p:961-969
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00114
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Cesarini & Erik Lindqvist & Matthew J. Notowidigdo & Robert Östling, 2017. "The Effect of Wealth on Individual and Household Labor Supply: Evidence from Swedish Lotteries," American Economic Review, American Economic Association, vol. 107(12), pages 3917-3946, December.
    2. Benedicte Apouey & Andrew E. Clark, 2015. "Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health," Health Economics, John Wiley & Sons, Ltd., vol. 24(5), pages 516-538, May.
    3. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2016. "Parental Resources and College Attendance: Evidence from Lottery Wins," NBER Working Papers 22679, National Bureau of Economic Research, Inc.
    4. Agarwal, Sumit & Mikhed, Vyacheslav & Scholnick, Barry, 2016. "Does inequality cause financial distress? Evidence from lottery winners and neighboring bankruptcies," Working Papers 16-4, Federal Reserve Bank of Philadelphia, revised 21 Oct 2016.
    5. Byun, Hyungsuk & Scholnick, Barry & Byun, Hyungsuk, 2017. "Spatial Commitment Devices and Addictive Goods: Evidence from the Removal of Slot Machines from Bars," Working Papers 17-34, Federal Reserve Bank of Philadelphia.
    6. Mikhed, Vyacheslav & Scholnick, Barry, 2016. "The Causes of Household Bankruptcy: The Interaction of Income Shocks and Balance Sheets," Working Papers 16-19, Federal Reserve Bank of Philadelphia.
    7. Mikhed, Vyacheslav & Scholnick, Barry, 2015. "Who is screened out of social insurance programs by entry barriers? Evidence from consumer bankruptcies," Working Papers 15-40, Federal Reserve Bank of Philadelphia.
    8. Brown, Jason & Fitzgerald, Timothy & Weber, Jeremy G., 2016. "Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties," Research Working Paper RWP 16-12, Federal Reserve Bank of Kansas City.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:93:y:2011:i:3:p:961-969. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristin Waites). General contact details of provider: http://mitpress.mit.edu/journals/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.