Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1220: Long-run Effects of Lottery Wealth on Psychological Well-being

Erik Lindqvist (), Robert Östling () and David Cecarini ()
Additional contact information
Erik Lindqvist: Department of Economics, Postal: Stockholm School of Economics and Research Institute of Industrial Economics (IFN), Stockholm, Sweden
Robert Östling: Institute for International Economic Studies
David Cecarini: Department of Economics, Postal: New York University and Research Institute of Industrial Economics (IFN), Stockholm, , Sweden

Abstract: We surveyed a large sample of Swedish lottery players about their psychological well-being and analyzed the data following pre-registered procedures. Relative to matched controls, large-prize winners experience sustained increases in overall life satisfaction that persist for over a decade and show no evidence of dissipating with time. The estimated treatment effects on happiness and mental health are significantly smaller, suggesting that wealth has greater long-run effects on evaluative measures of well-being than on affective ones. Follow-up analyses of domain-specific aspects of life satisfaction clearly implicate financial life satisfaction as an important mediator for the long-run increase in overall life satisfaction.

Keywords: Psychological Well-being; Subjective Well-being; Happiness

JEL-codes: D69; I31

60 pages, June 18, 2018

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