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Happy Lottery Winners and Lottery‐Ticket Bias
Author(s) -
Kim Seonghoon,
Oswald Andrew J.
Publication year - 2021
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12469
Subject(s) - lottery , happiness , economics , advertising , public economics , microeconomics , psychology , business , social psychology
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.