Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2008-05-15
Revision-Date: 2010-05-05
Number: 08-048/1
Author-Name: Peter Kuhn
Author-Email: pjkuhn@econ.ucsb.edu
Author-Workplace-Name: University of California at Santa Barbara
Author-Name: Peter Kooreman
Author-Workplace-Name: Tilburg University
Author-Name: Adriaan R. Soetevent
Author-Email: a.r.soetevent@uva.nl
Author-Workplace-Name: University of Amsterdam (ASE)
Author-Name: Arie Kapteyn
Author-Workplace-Name: RAND and Tilburg University
Title: The Own and Social Effects of an Unexpected Income Shock
Abstract: Each week, the Dutch Postcode Lottery (PCL) randomly selects a postal code, and distributes cash and a new BMWto 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 otherdurables. 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 towinners have significantly higher levels of car consumption than other nonparticipants.
Classification-JEL: D12; C21
Keywords: social interactions; natural experiments
File-Url: https://papers.tinbergen.nl/08048.pdf
File-Format: application/pdf
File-Size: 275120 bytes
Handle: RePEc:tin:wpaper:20080048