Skip to content

Conference Paper BHPS-2009 Conference: the 2009 British Household Panel Survey Research Conference, 9-11 July 2009, Colchester, UK

Winning big but feeling no better? The effect of lottery prizes on physical and mental health

Authors

Publication date

2009

Abstract

We use British Household Panel Survey data to explore the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and behavioural variables (alcohol consumption and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as these are largely unanticipated and therefore exogenous. These positive income shocks have no significant effect on general health, but a large positive effect on mental health, supporting recent findings in the literature. 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 income actually has a negative effect on risky behaviours:lottery winners smoke more and engage in more social drinking. General health will pick up both mental and behavioural elements, which move in opposite directions following a positive income shock. This paper presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions

Subjects

Income Dynamics and Well Being

Links

http://www.iser.essex.ac.uk/events/conferences/bhps-2009-conference/programme

#512674


Research home

Research home

News

Latest findings, new research

Publications search

Search all research by subject and author

Podcasts

Researchers discuss their findings and what they mean for society

Projects

Background and context, methods and data, aims and outputs

Events

Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report

Themes

Key research themes and areas of interest