TY - JOUR
T1 - The effects of lottery prizes on winners and their neighbours
T2 - Evidence from the Dutch Postcode Lottery
AU - Kuhn, P.
AU - Kooreman, P.
AU - Soetevent, A.
AU - Kapteyn, A.
PY - 2011
Y1 - 2011
N2 - 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.
AB - 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.
M3 - Article
SN - 0002-8282
VL - 101
SP - 2226
EP - 2247
JO - American Economic Review
JF - American Economic Review
IS - 5
ER -