Winning Big But Feeling No Better? The Effect of Lottery Prizes on Physical and Mental Health
42 Pages Posted: 8 Feb 2010
There are 2 versions of this paper
Winning Big but Feeling No Better? The Effect of Lottery Prizes on Physical and Mental Health
Abstract
We use British panel data to determine the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and health behaviors (drinking and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as the amount won by winners is largely exogenous. Positive income shocks have no significant effect on general health, but a large positive effect on mental health. This result seems paradoxical on two levels. First, there is a well-known status gradient in health in cross-section data, and, second, general health should partly reflect mental health, so that we may expect both variables to move in the same direction. We propose a solution to the first apparent paradox by underlining the endogeneity of income. For the second, we show that lottery winnings are also associated with more smoking and social drinking. General health will reflect both mental health and the effect of these behaviors, and so may not improve following a positive income shock. This paper thus presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions.
Keywords: income, self-assessed health, mental health, smoking, drinking
JEL Classification: D1, I1, I3
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Impact of Income on Mortality: Evidence from the Social Security Notch
-
Deaths Rise in Good Economic Times: Evidence from the OECD
By Ulf Gerdtham and Christopher J. Ruhm
-
Deaths Rise in Good Economic Times: Evidence from the OECD
By Ulf Gerdtham and Christopher J. Ruhm
-
Recessions Lower (Some) Mortality Rates: Evidence from Germany
-
Unemployment and Infant Health: Times-Series Evidence from the State of Tennessee
By Theodore Joyce and Naci H. Mocan