Winning Big but Feeling no Better? The Effect of Lottery Prizes on Physical and Mental Health
We use British panel data to explore the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and health behaviours (drinking and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as the amount won is largely exogenous. These positive income shocks have no significant effect on general health, but a large positive effect on mental health. This result seems paradoxical on two levels. First, there is a well-known status gradient in health in cross-section data, and, second, general health should partly reflect mental health, so that we may expect both variables to move in the same direction. We propose a solution to the first apparent paradox by underlining the endogeneity of income. For the second, we show that exogenous income is associated with greater risky health behaviours: lottery winners smoke more and engage in more social drinking. General health will pick up both mental health and the effect of these behaviours, and so may not improve following a positive income shock. This paper presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions.
|Date of creation:||Nov 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.feem.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Taylor, Mark P, 1999.
"Self-Employment and Windfall Gains in Britain: Evidence From Panel Data,"
CEPR Discussion Papers
2084, C.E.P.R. Discussion Papers.
- Taylor, Mark P, 2001. "Self-Employment and Windfall Gains in Britain: Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 68(272), pages 539-65, November.
- Angus Deaton & Christina Paxson, 1999.
"Mortality, Education, Income, and Inequality among American Cohorts,"
NBER Working Papers
7140, National Bureau of Economic Research, Inc.
- Angus S. Deaton & Christina Paxson, 2001. "Mortality, Education, Income, and Inequality among American Cohorts," NBER Chapters, in: Themes in the Economics of Aging, pages 129-170 National Bureau of Economic Research, Inc.
- Angus Deaton & Christina Paxson, 1999. "Mortality, education, income and inequality among American cohorts," Working Papers 279, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
- John Ermisch & Marco Francesconi & David J. Pevalin, 2004. "Parental partnership and joblessness in childhood and their influence on young people's outcomes," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 167(1), pages 69-101.
- James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
- Andrew Henley, 2004. "House Price Shocks, Windfall Gains and Hours of Work: British Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(4), pages 439-456, 09.
- Powdthavee, Nattavudh, 2009.
"Ill-health as a household norm: Evidence from other people's health problems,"
Social Science & Medicine,
Elsevier, vol. 68(2), pages 251-259, January.
- N Powdthavee, 2008. "Ill-Health as a Household Norm: Evidence from Other People's Health Problems," Discussion Papers 08/21, Department of Economics, University of York.
- Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
- Jerome Adda & James Banks & Hans-Martin von Gaudecker, 2007.
"The impact of income shocks on health: evidence from cohort data,"
IFS Working Papers
W07/05, Institute for Fiscal Studies.
- Jér�me Adda & James Banks & Hans-Martin von Gaudecker, 2009. "The Impact of Income Shocks on Health: Evidence from Cohort Data," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1361-1399, December.
- Adda, Jérôme & Banks, James & Gaudecker, Hans-Martin von, 2008. "The Impact of Income Shocks on Health: Evidence from Cohort Data," IZA Discussion Papers 3329, Institute for the Study of Labor (IZA).
- Jérome Adda & James Banks & Hans-Martin von Gaudecker, 2007. "The Impact of Income Shocks on Health: Evidence from Cohort Data," MEA discussion paper series 07146, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Christopher J. Ruhm, 2000.
"Are Recessions Good For Your Health?,"
The Quarterly Journal of Economics,
MIT Press, vol. 115(2), pages 617-650, May.
- Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
- Frijters, Paul & Haisken-DeNew, John P. & Shields, Michael A., 2005.
"The causal effect of income on health: Evidence from German reunification,"
Journal of Health Economics,
Elsevier, vol. 24(5), pages 997-1017, September.
- Paul Frijters, 2005. "The causal effect of income on health: Evidence from German reunification," Paul Frijters Discussion Papers 2005-2, School of Economics and Finance, Queensland University of Technology.
- Gardner, Jonathan & Oswald, Andrew J., 2007.
"Money and mental wellbeing: A longitudinal study of medium-sized lottery wins,"
Journal of Health Economics,
Elsevier, vol. 26(1), pages 49-60, January.
- Gardner, Jonathan & Oswald, Andrew J., 2006. "Money and Mental Wellbeing : A Longitudinal Study of Medium-Sized Lottery Wins," The Warwick Economics Research Paper Series (TWERPS) 754, University of Warwick, Department of Economics.
- Gardner, Jonathan & Oswald, Andrew J., 2006. "Money and Mental Wellbeing: A Longitudinal Study of Medium-Sized Lottery Wins," IZA Discussion Papers 2233, Institute for the Study of Labor (IZA).
- Christopher J. Ruhm, 2003.
"Healthy Living in Hard Times,"
NBER Working Papers
9468, National Bureau of Economic Research, Inc.
- Jonathan Meer & Douglas L. Miller & Harvey S. Rosen, 2003.
"Exploring the Health-Wealth Nexus,"
NBER Working Papers
9554, National Bureau of Economic Research, Inc.
- van Doorslaer, Eddy & Wagstaff, Adam & Bleichrodt, Han & Calonge, Samuel & Gerdtham, Ulf-G. & Gerfin, Michael & Geurts, Jose & Gross, Lorna & Hakkinen, Unto & Leu, Robert E., 1997. "Income-related inequalities in health: some international comparisons," Journal of Health Economics, Elsevier, vol. 16(1), pages 93-112, February.
- Andrew J. Oswald & Rainer Winkelmann, 2008. "Delay and Deservingness after Winning the Lottery," SOI - Working Papers 0815, Socioeconomic Institute - University of Zurich.
- Douglas L. Miller & Marianne E. Page & Ann Huff Stevens & Mateusz Filipski, 2009. "Why Are Recessions Good for Your Health?," American Economic Review, American Economic Association, vol. 99(2), pages 122-27, May.
- Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-26, November.
- Christopher J. Ruhm, 2001. "Economic Expansions Are Unhealthy: Evidence from Microdata," NBER Working Papers 8447, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2009.96. 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: (barbara racah)
If references are entirely missing, you can add them using this form.