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Working Paper No. 1220

Long-run Effects of Lottery Wealth on Psychological Well-being

Working Paper
Lindqvist, Erik, Robert Östling and David Cesarini (2018). “Long-run Effects of Lottery Wealth on Psychological Well-being”. IFN Working Paper No. 1220. Stockholm: Research Institute of Industrial Economics (IFN).

Erik Lindqvist, Robert Östling, David Cesarini

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.