Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 11/2021: Material resources and well-being — Evidence from an Ethiopian housing lottery

Asbjørn G. Andersen , Andreas Kotsadam and Vincent Somville ()
Additional contact information
Asbjørn G. Andersen: Ragnar Frisch Centre for Economic Research
Andreas Kotsadam: Ragnar Frisch Centre for Economic Research
Vincent Somville: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: Do better material conditions improve well-being and mental health? Or does any positive relationship merely reflect that psychological well-being promotes economic success? We supply new responses to these questions by comparing winners and losers from a large Ethiopian housing lottery in a preregistered analysis. Winners gain access to better housing, experience a substantial increase in wealth, and report higher levels of overall life satisfaction and lower levels of financial distress. However, we find no effects of winning on psychological distress, suggesting that depression and anxiety involve other causal determinants and are less sensitive to economic conditions than life satisfaction is.

Keywords: Housing lottery; Mental health

JEL-codes: I00

87 pages, April 26, 2021

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