Experimental and Behavioral Economics Seminar

What Is the Long-Run Causal Relationship between Unearned Wealth and Psychological Well-being?

Robert Östling (Institute for International Economic Studies)
What Is the Long-Run Causal Relationship between Unearned Wealth and Psychological Well-being?
December 8, 2017 | 12:00 - 13:00 | BLU-003

Abstract: Does unearned wealth bring long-run happiness or well-being? We surveyed a large sample of Swedish lottery players about their wellbeing and analyzed the data following pre-registered procedures. Relative to matched controls from the same lotteries, large-prize winners experience sustained increases in overall life satisfaction that persist for at least fifteen years and show no evidence of dissipating with time. Follow-up analyses of domain-specific aspects of life satisfaction clearly implicate financial life satisfaction as an important mediating variable. The estimated treatment effects on happiness and mental health are significantly smaller, suggesting that unearned wealth has stronger long-run effects on evaluative measures of wellbeing than on affective ones.