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 language | English |
|---|---|
| Pages (from-to) | 2226-2247 |
| Journal | American Economic Review |
| Volume | 101 |
| Issue number | 5 |
| Publication status | Published - 2011 |
Fingerprint
Dive into the research topics of 'The effects of lottery prizes on winners and their neighbours: Evidence from the Dutch Postcode Lottery'. Together they form a unique fingerprint.Cite this
- APA
- Author
- BIBTEX
- Harvard
- Standard
- RIS
- Vancouver