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Can Unearned Income Make Us Fitter? Evidence from Lottery Wins

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  • Joan Costa-i-Font
  • Mario Gyori

Abstract

Although lower income is associated with overweight (and obesity), such an association is explained by a number of other confounding effects such as omitted variables (e.g., time preferences) explaining that income effect on overweight. We study the effect of unearned income shocks resulting from a lottery win (windfall income) on both overweight (alongside obesity and body mass index) distribution. We draw upon longitudinal data from the United Kingdom, a country where about half of a population plays the lottery. Our results suggest no evidence of contemporaneous effects of income on overweight, but a significant lagged effect. We find a reduction in overweight 12 months after a lottery win. A 10,000-sterling win reduces overweight by 2-3 percentage points. Furthermore, we document a nonlinear effect up to 36 months after the lottery win, suggesting that small wins increase overweight and large wins reduce it. The effect of a lottery win varies depending on an individual’s working hours and educational attainment. A lottery win among low education individuals decreases the risk of overweight.

Suggested Citation

  • Joan Costa-i-Font & Mario Gyori, 2020. "Can Unearned Income Make Us Fitter? Evidence from Lottery Wins," CESifo Working Paper Series 8738, CESifo.
    • Handle: RePEc:ces:ceswps:_8738
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    More about this item

    Keywords

    obesity; overweight; income; windfall income; lottery wins; body mass index (BMI);
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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