The Effects of Lottery Prizes on Winners and Their Neighbors: Evidence from the Dutch Postcode Lottery

By Peter Kuhn, Peter Kooreman, A. Soetevent, A. Kapteyn. Social Science Research Network, 2011

357 citations recorded by the source corpus.

Each week, the Dutch Postcode Lottery (PCL) randomly selects a postal code, and distributes cash and a new BMW to lottery participants in that code. We study the effects of these shocks on lottery winners and their neighbors. Consistent with the life-cycle hypothesis, the effects on winners’ consumption are largely confined to cars and other durables. Consistent with the theory of in-kind transfers, the vast majority of BMW winners liquidate their BMWs. We do, however, detect substantial social effects of lottery winnings: PCL nonparticipants who live next door to winners have significantly higher levels of car consumption than other nonparticipants.

Subfields: Clinical Psychology, Economics and Econometrics, General Decision Sciences

View Paper: https://www.semanticscholar.org/paper/43c0cd37388e3b610347d0c663d3ee750b9675b5

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In Clinical Psychology

Andrew E. Clark

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Citations in the corpus

THE SHORT-TERM IMPACT OF UNCONDITIONAL CASH TRANSFERS TO THE POOR: EXPERIMENTAL EVIDENCE FROM KENYA (2016, unknown): “Currently, it is difficult to discern a pattern—Paxson and Schady (2010) and Kuhn et al. (2011) studied depression and happiness, respectively, and found no effects of transfers on these outcomes, but these outcomes show positive responses to windfalls in both the present article and some previous…”
Household Debt and Social Interactions (2012, background): “Recent work by Kuhn et al. (2011) finds that exogenous variations in income from winning a Dutch postal lottery tend to influence not only the 4 Most existing theoretical models, which are based on an infinite-horizon representative agent, imply greater consumption, less leisure, and greater…”
Attitudes to Income Inequality: Experimental and Survey Evidence (2014, background): “Kuhn et al. (2011) consider observed large changes in close neighbours’ incomes, which result from the design of the Dutch postcode lottery.”
Social Image and Economic Behavior in the Field: Identifying, Understanding and Shaping Social Pressure (2017, unknown): “Using data from Canada, Agarwal et al. (2016) find that such households are more likely to file for bankruptcy later, and Kuhn et al. (2011) find that such households in the Netherlands have higher levels of expenditures on cars.”
MPC Heterogeneity and Household Balance Sheets (2016, unknown): “Browning and Leth−Petersen (2003) (and later Kreiner, Lassen, and Leth-Petersen, 2015) implement this method using Danish register data, Brinch, Eika, and Mogstad (2015) and Fagereng and Halvorsen (2015) using Norwegian data and Koijen, Van Nieuwerburgh, and Vestman (2015) using Swedish data.”
Trickle-Down Consumption (2016, unknown): “12 For example, Kuhn et al. (2011) find that neighbors of lottery winners are significantly more likely to buy a car. See also Grinblatt, Keloharju, and Ikaheimo (2008) and Shemesh and Zapatero (2012). 875 TRICKLE-DOWN CONSUMPTION”