Presented By: Department of Economics
Social, Behavioral & Experimental Economics (SBEE): What Is the Long-Run Causal Relationship between Wealth and Psychological Well-being?
David Cesarini, NYU
Abstract:
There is a positive association between income and psychological well-being that diminishes in strength as income rises, but the causal pathways behind this association remain imperfectly understood. We surveyed a large sample of Swedish lottery players and analyzed the data following pre-registered procedures. Comparisons of large-prize winners (typical prize range: $100K - $800K) to matched controls selected from the same lottery populations allow us to make credible causal inferences about the long-run effects of wealth. For two evaluative measures of well-being – Overall Life Satisfaction and Financial Life Satisfaction – we find clear evidence of positive effects that survive multiple-hypothesis corrections and persist well over a decade after winning the lottery. The estimated treatment effects on Happiness and Mental Health are significantly smaller and not statistically different from zero.
There is a positive association between income and psychological well-being that diminishes in strength as income rises, but the causal pathways behind this association remain imperfectly understood. We surveyed a large sample of Swedish lottery players and analyzed the data following pre-registered procedures. Comparisons of large-prize winners (typical prize range: $100K - $800K) to matched controls selected from the same lottery populations allow us to make credible causal inferences about the long-run effects of wealth. For two evaluative measures of well-being – Overall Life Satisfaction and Financial Life Satisfaction – we find clear evidence of positive effects that survive multiple-hypothesis corrections and persist well over a decade after winning the lottery. The estimated treatment effects on Happiness and Mental Health are significantly smaller and not statistically different from zero.
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