July 2006

IZA DP No. 2233: Money and Mental Wellbeing: A Longitudinal Study of Medium-Sized Lottery Wins

Jonathan Gardner, Andrew J. Oswald

published in: Journal of Health Economics, 2007, 26 (1), 49-60

One of the famous questions in social science is whether money makes people happy. We offer new evidence by using longitudinal data on a random sample of Britons who receive medium-sized lottery wins of between £1000 and £120,000 (that is, up to approximately U.S. $200,000). When compared to two control groups – one with no wins and the other with small wins – these individuals go on eventually to exhibit significantly better psychological health. Two years after a lottery win, the average measured improvement in mental wellbeing is 1.4 GHQ points.