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American Economic Review: Vol. 101 No. 5 (August 2011)
AER Volume. 101, Issue 5 | 
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The Effects of Lottery Prizes on Winners and Their Neighbors: Evidence from the Dutch Postcode Lottery
Article Citation
Kuhn, Peter,
Peter Kooreman,
Adriaan Soetevent, and
Arie Kapteyn. 2011. "The Effects of Lottery Prizes on Winners and Their Neighbors: Evidence from the Dutch Postcode Lottery."
American Economic Review,
101(5): 2226-47.
DOI: 10.1257/aer.101.5.2226
DOI: 10.1257/aer.101.5.2226
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.
JEL: D14, D91, H23, H27
Article Full-Text Access
Full-text Article
Additional Materials
Download Data Set (327.19 KB) | Download Additional Materials (572.52 KB)
Authors
Kuhn, Peter (U CA, Santa Barbara)
Kooreman, Peter (Tilburg U)
Soetevent, Adriaan (U Amsterdam)
Kapteyn, Arie (RAND Corporation, Santa Monica, CA)
Kooreman, Peter (Tilburg U)
Soetevent, Adriaan (U Amsterdam)
Kapteyn, Arie (RAND Corporation, Santa Monica, CA)
JEL Classifications
D14: Personal Finance
D91: Intertemporal Consumer Choice; Life Cycle Models and Saving
H23: Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H27: Taxation, Subsidies, and Revenues: Other Sources of Revenue
D91: Intertemporal Consumer Choice; Life Cycle Models and Saving
H23: Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H27: Taxation, Subsidies, and Revenues: Other Sources of Revenue
