The effects of lottery prizes on winners and their neighbours

Evidence from the Dutch Postcode Lottery

P. Kuhn, P. Kooreman, A. Soetevent, A. Kapteyn

Research output: Contribution to journalArticleScientificpeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)2226-2247
JournalAmerican Economic Review
Volume101
Issue number5
Publication statusPublished - 2011

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Lottery
Car
Life cycle hypothesis
Durables
In-kind transfers
Cash

Cite this

Kuhn, P. ; Kooreman, P. ; Soetevent, A. ; Kapteyn, A. / The effects of lottery prizes on winners and their neighbours : Evidence from the Dutch Postcode Lottery. In: American Economic Review. 2011 ; Vol. 101, No. 5. pp. 2226-2247.
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Kuhn, P, Kooreman, P, Soetevent, A & Kapteyn, A 2011, 'The effects of lottery prizes on winners and their neighbours: Evidence from the Dutch Postcode Lottery', American Economic Review, vol. 101, no. 5, pp. 2226-2247.

The effects of lottery prizes on winners and their neighbours : Evidence from the Dutch Postcode Lottery. / Kuhn, P.; Kooreman, P.; Soetevent, A.; Kapteyn, A.

In: American Economic Review, Vol. 101, No. 5, 2011, p. 2226-2247.

Research output: Contribution to journalArticleScientificpeer-review

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