Most of us have dreamt about winning big in the lottery – I know I have. This dream came true for a French ticket-holder, who won the record £184 million EuroMillions jackpot.
A sudden income of £184 million would no doubt be life-changing. But what do we actually know about the effects of lottery wins on our lives? Will being a jackpot winner make us happy now, or in the future?
I’ve spent my career researching how our happiness and wellbeing can be effected by life changes, decisions and luck – including the lottery. Here’s what I’ve learned about how winning the lottery can potentially change people’s lives.
Winning a moderate amount of money in the lottery has an effect on who we are, how we spend our money and what we want to do with our lives. In various studies, my colleagues and I have found that winning at least £500 in the National Lottery makes people significantly more right-wing and less egalitarian, more likely to switch to private health insurance and to become self-employed.
Evidence on whether winning the lottery makes you happy is somewhat mixed. Using a British sample of over 16,000 lottery winners with an average win of several thousand pounds, economists Andrew Oswald and Jonathan Gardner, and later economists Benedicte Apouey and Andrew Clark, reported large and positive effects of wealth on winners’ mental health appearing two years after the win.
However, a more recent study of the Dutch Postcode Lottery focusing on a larger lottery win of a median US$22,500 (£16,400) albeit with a smaller sample size of winners to the British study (223 people) found little evidence that lottery wins affected people’s happiness in a statistically significant way.
Most of these previous studies have looked at the effects of winning several thousand dollars in the lottery – but what about the massive winners?
Until recently, we did not have many observations of big lottery winners to conduct a meaningful study of the effects. People who win more than US$100,000 (£73,000) in the lottery do not typically feature in nationally representative household surveys as there are so few of them in any randomly selected household.
This also means that any previous studies that tried to estimate the psychological impacts of large lottery wins would have too small a sample size to make any statistical findings conclusive.
In an attempt to settle this issue once and for all, ruay three economists – Erik Lindqvist, Robert Östling, and David Cesarini – have conducted one of the largest studies to date of the long term effects of big lottery wins on psychological wellbeing.
With an average win of US$106,000 (£77,000) and a sample size of more than 2,500 winners in the Swedish Lottery, they found big winners’ overall life satisfaction to be significantly higher than that of small winners and non-winners with similar characteristics. This persists more than five years after the win.
Life satisfaction is a measure of evaluative wellbeing – the overall evaluation of how one views one’s life. This is distinct from experienced wellbeing – the positive emotions that we experience day-to-day.
The Swedish study found little evidence that winning a large amount of money in the lottery had any significant impact on winners’ happiness, which is a measure of experienced wellbeing. They also found winning big in the lottery does not substantially improve people’s current mental health.
This is consistent with a study by Nobel prize-winning economists Daniel Kahneman and Angus Deaton, which showed that beyond a US$75,000 (£54,600) threshold, measures of evaluative wellbeing continue to rise with income whereas measures of experienced wellbeing, like happiness and mental health, do not.
Furthermore, there was no evidence in the Swedish lottery study that a US$100,000 win significantly improved people’s satisfaction with their health, relationship, housing, neighbourhood and society.
The evidence from these studies suggests that winning the EuroMillions jackpot would significantly and sustainably improve the way we think about our finances and how our lives turn out in the long run, but it is less likely to make our day-to-day life feel more enjoyable.
For most of us, our dreams of winning big in the lottery will never materialise. But just buying a ticket can give us a warm, thrilling feeling of anticipation while we wait for the lucky numbers to be drawn. Psychologists call this the “let me dream on” effect. That reason alone might be good enough for us to keep playing.