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Q: lottery winners ( Answered 5 out of 5 stars,   2 Comments )
Question  
Subject: lottery winners
Category: Business and Money
Asked by: qpet-ga
List Price: $40.00
Posted: 10 Jan 2003 08:55 PST
Expires: 09 Feb 2003 08:55 PST
Question ID: 141224
I am interested if there are any studies that have followed lottery
winners. What aspects of their lives have changed. Short term and long
term. Hopefully there are several sources on this.

Clarification of Question by qpet-ga on 10 Jan 2003 13:33 PST
Thank you for starting to answer the question- you are on the right track!
any chance of getting a summary of the book?
Answer  
Subject: Re: lottery winners
Answered By: bobbie7-ga on 10 Jan 2003 15:35 PST
Rated:5 out of 5 stars
 
Hi Qpet! It’s nice to see you again.  I will be answering this
question as Bowler-ga is not a Google Researcher.


Here are the results of my research on studies that have followed
lottery winners. I have included statistics and short excerpts as
well.


Winning $15,000 a year for 20 years - no major effect on your life

Winning $80,000 a year for 20 years - would affect your labor force
participation, automobile expenditures, the value of the home you own,
and your savings.

How much would your life change if you won a substantial lottery
prize?

According to a recent study by Guido W. Imbens, Donald B. Rubin, and
Bruce Sacerdote:

“Winning $15,000 a year for 20 years would not have a major effect on
your life. However, if you instead won $80,000 a year for 20 years, it
would affect your labor force participation, automobile expenditures,
the value of the home you own, and your savings.

(..)

“A prize of $15,000 a year had little effect on the labor supply of
the winners. However, they also found that winning $80,000 rather than
$15,000 reduced labor supply significantly. Additionally, estimates by
Imbens, Rubin, and Sacerdote indicated that, in this case, car values
rose (by at least $5,500 on average), home values increased (by
$30,000 on average), and savings went up (especially in the form of
bonds and mutual funds).”

Source: Bureau of Labor Statistics
http://www.bls.gov/opub/mlr/1999/07/precis.htm


Evidence from the  Survey of Lottery Players by Guido W. Imbens,
Donald B. Rubin, and Bruce I. Sacerdote indicates:
     
“We find that unearned income reduces labor earnings, with a marginal
propensity to consume leisure of approximately 11 percent, with larger
effects for individuals between 55 and 65 years old. After receiving
about half their prize, individuals saved about 16 percent.”

Source: American Economic review
http://www.aeaweb.org/aer/contents/sept2001.html#2


*****************


Camelot Group Plc, operator of The UK National Lottery, has released
the first ever major survey of National Lottery winners to discover
what effect the lottery really has on happiness, lifestyles and
relationships.

The survey gives a uniquely historic insight into the lives of Lottery
winners over the last five years. I have summarized the article.

55% - are happier after winning
43% - no affect on happiness
2%  - are less happy

“The happiness of the winner is not affected by the size of his or her
win.”

Of the 55% of winners who are happier:
65% - claimed the reasons are improved financial security and fewer
worries
23% - say they can buy what they want and that life is a lot easier. 

There are no negative effects on family life or friendships:

95%  -  remained married after winning
100% -  who were living with a partner prior to their win (but not
married), are still in the same relationship (whether now married or
not)

Increased happiness of winners’ families is dependent on the size of
their relative’s win.
 
58% of winners of 250k or more state that their family is happier. 
37% of winners of 250k or less state that their family is happier.

The main reason for improved family happiness is increased financial
security (34%).

83% - have given some of their winnings to their family. 

Of these:
66% - have given money to their siblings
57% - have given money to their children 
51% - have given money to their parents. 

“The findings also indicate that the larger the win, the more likely
that the winner’s family will ask for money.”

17% - of families asked for winnings from winners of 50k-250k, 
29% - of families asked for winnings from winners of 2m+. 

=======
Friends
=======

90% of winners who already had a best friend before winning are still
best friends with the same person.

Generosity: 
Men give money to three friends.
Women give money to one friend. 


==========
Lifestyles 
==========

The lifestyles of many Lottery winners have changed significantly. 

40% increased contributions to charity.
19% of winners went on holiday abroad for the first time.
12% of winners have still not been abroad.
7% of winners say a caravan is one of their major purchases. 
<40% of winners have moved since their win.


Of those who have moved:
75% now live in detached houses.

“Most of those who have moved have not moved far – an average of nine
miles.”

26% of winners of large amounts often own more than one home and
25% of those own a property abroad. 

10% of winners have switched to private medical care.
1% has had plastic surgery.
3% have moved their children from state schools to private schools. 

84% of winners have not taken up any new hobbies since their win. 
12% of winners have joined health clubs.
32% of all winners state they have gained weight since their win.
14% lost weight. 

44% of their winnings were spent after 5 years
 

====================
Food Shopping Habits
====================

37% of winners still buy supermarket own brands, regardless of the
size of the win.
4% claim to have switched from buying supermarket brands to individual
brands.


====
Work
====

48% of winners who were in regular work before their win are
still in the same job.
27% of winners of elevated amounts are still in the same job.
56% of winners of more than 1m have given up work.
15% have started a new job since their win.
45% of those have started their own business.


“Winning the Lottery appears to have very little impact on the
winners’ perception of their social class or their political
persuasion.”

52% of winners of 2m+ consider themselves to be working class,
compared with 60% before their win.

88% of lottery winners still participate in the lottery every week.
2% have stopped playing altogether. 

Source: Nettime
http://amsterdam.nettime.org/Lists-Archives/nettime-l-9912/msg00037.html


*****************


Study by Dr. H. Roy Kaplan:

Winning the lottery had little adverse impact on the work habits.

“A study of lottery winners by Dr. H. Roy Kaplan of the Florida
Institute of Technology revealed that winning the lottery had little
adverse impact on the work habits of lottery winners. A recent study
of 39 lottery winners from Roby, Texas supported Dr. Kaplan’s
findings.”
Source: The Institute for Socioeconomic Studies
http://www.socioeconomic.org/Tax_Rebate_/tax_rebate_.HTM


According to Dr. H. Roy Kaplan author of several books on lottery
winners, “winning the lottery doesn't change people's lives as much as
is imagined.

(..)
 
“You can catapult people from one economic status to another
overnight, but a lifetime of beliefs and experiences change more
slowly.

People who were outgoing and gregarious before winning took it in
stride," Kaplan said. "People who were shy and withdrawn before
winning became suspicious and paranoid.

Most lottery winners keep their jobs, but find their relationship with
co-workers changed. Most are inundated with requests for money, both
from friends and strangers.

Money doesn't change a person's level of happiness, said Kennon
Sheldon, a psychologist at the University of Missouri at Columbia. "We
consistently find that people who say money is most important to them
are (the unhappiest)," Sheldon said.”
 
Source: Gaming magazine
http://www.gamingmagazine.com/managearticle.asp?c=220&a=1156


*****************


“42% percent of Americans would keep their current job even if they
won at least $10 million in the lottery, said Nancy Bunn, spokeswoman
for Burke Incorporated of Cincinnati, the contractor that conducted
the survey. The percentage of would-be lottery winners that would keep
their jobs was even higher among respondents older than 45.”
Source: ABC News
http://abcnews.go.com/sections/living/DailyNews/happiness010211.html


*****************

Nearly one-third of lottery winners become bankrupt.

“The CFP Board made an offer to the National Association of State and
Provincial Lotteries to provide the organization's members with
information to distribute to winners. The Investment News article
highlighted the lack of financial guidance many winners receive from
state lottery agencies; estimates show that nearly one-third of
lottery winners become bankrupt.”
Source: Certified Financial Planner Board of Standards, Inc
http://www.cfp-board.org/bulletin.html


*****************

Wealth brings unhappiness.

“A new study by American psychologists has found that cash and
popularity do not bring nirvana. Experts say that excessive wealth,
particularly for people unaccustomed to it, such as lottery winners,
can actually cause unhappiness.

(..) 

There is evidence that there are very wealthy people who are very
unhappy, particularly people who were not born to wealth like lottery
winners.”
Source: BBC News
http://news.bbc.co.uk/1/hi/health/1162153.stm


*****************

An interesting study by Brickman, Coates, and Janoff-Bulman:

“The researchers studied both lottery winners and individuals that
sustained a physical injury, to determine if winning the lottery made
them happier or if sustaining an injury made them less happy. What
they found was that immediately after either event, levels of
happiness were higher (lottery winners), or lower (physically
injured), and that after eight weeks or less, people returned to the
level of happiness they had before the event. This research suggests
that we adapt to these situations very quickly, and often return to
the degree of happiness we had before such an event.”
Source: University of California Regents
http://ucsfhr.ucsf.edu/hrupdate/update200202.htm


*****************

A San Francisco Chronicle article titled “Big lottery winners know a
lot about what not to do” states:

“The newly wealthy spend most of their first $1 million on travel” 

“Research shows that a significant number of lottery winners lose
their winnings within five years, said Stephen Goldbart, a
psychologist and co- director of the Money, Meaning and Choices
Institute in Kentfield, which advices people who come into financial
windfalls.”

"We've seen people who had decent marriages who came into money and it
destroyed the marriage. Bringing a huge amount of money into the scene
is a life-changing event," Goldbart said.”

“A hermit drank himself to death just two years after winning $2.57
million (1.8 million pounds) in the lottery.”

“Tom Grey, spokesman for the National Coalition against Legalized
Gambling, said Virginia state lottery officials found in 1999 that of
300 millionaire winners, as many as 60 eventually encountered
financial problems.”

Source: San Francisco Chronicle article 2002
http://www.geocities.com/ccd4664/BigLottoryWinners.htm


*****************

“Researchers have identified many elements that people report wanting
that don't really bring lasting happiness once obtained. For instance,
there are interesting data on the clinical depression of megabuck
lottery winners, or that the reported happiness of the rich is not
significantly higher than the average person's. Apparently, large
amounts of wealth, fame, power, sex, and prestige do not bring
above-average happiness over time.”

Aaccording to ABC's John Stossel, "Studies of lottery winners found
that within a year, most say that they are no happier than they were
before they won."
http://www.geocities.com/Athens/Pantheon/8320/HAPPNSS.htm

Further reading:

The Psychological Impact of Sudden Wealth 
Journal of Financial Planning by Eileen Gallo
January 30, 2001 
http://www.psycport.com/2001/01/30/13790/67382837-1238-KEYWORD.Missing.html

*****************


Search Criteria:

study on Lottery winners
life changes in lottery winners
“lottery prizes” “life changes”
“lottery winners” “life changes”
“lottery winners” impact life studies
Kaplan Lottery Winners
changes in lifestyles of lottery winners


This question has been very interesting to research and I hope the
material helps you in your project.


Kindest Regards,
Bobbie7-ga

Clarification of Answer by bobbie7-ga on 10 Jan 2003 17:48 PST
Qpet.

Thank you for the five star rating and comment and I really appreciate
your generous tip. The subject of lottery winners captivated my
interest.

--Bobbie7-ga
qpet-ga rated this answer:5 out of 5 stars and gave an additional tip of: $20.00
Excelent answer! Great variety of sources! Good summary!
Thank you,
qpet-ga

Comments  
Subject: Re: lottery winners
From: bowler-ga on 10 Jan 2003 12:04 PST
 
There is a book which may help:

http://www.powells.com/cgi-bin/biblio?show=Trade%20Paper:Sale:1551520826:10.00

I have found several quotes that say something similiar to this:

Studies of Lottery winners show that though their win can cause great
elation for a while, their
sense of overall wellbeing eventually returns to its previous level-
whether they were happy or not.
http://www.bbc.co.uk/health/mens/mind_happiness.shtml

I'll continue to look for other examples and post as necessary.
Subject: Re: lottery winners
From: rikomatic-ga on 15 Oct 2003 00:44 PDT
 
Thank you for compiling this research.  It really is fascinating
reading.

One comment on the levels of happiness.  Some of the studies cited
indicate that level of happiness may go down as a result of a big
windfall. The study of the UK winners seems in many ways the most
thorough and comprehensive.  Taking those figures, there is a 43%
chance that you will be as happy as you are now if you win the
lottery.  As the Brickman, Coates, and Janoff-Bulman study maintains,
we generally return to whatever level of happiness we had before the
win.

So the assumption that winning the lottery will automatically make
your life much better seems to unsupported by data.  Interesting.

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