The effects of income on health: Evidence from lottery wins in Singapore

Seonghoon Kim; Kanghyock Koh

doi:10.1016/j.jhealeco.2020.102414

The effects of income on health: Evidence from lottery wins in Singapore

Seonghoon Kim, Kanghyock Koh

Department of Economics

Research output: Contribution to journal › Article › peer-review

11 Citations (Scopus)

Abstract

We estimate the causal effects of household income on self-reported health status by exploiting random variations in the amount of lottery prizes won. We find that a S$10,000 (US$7,245) increase in income via lottery wins improves individuals’ health by a standard deviation of 0.18. As possible mechanisms, we find that lottery wins increase household consumption spending and improve overall life satisfaction, but do not change healthcare spending, labor supply, and risky health behavior. Previous studies, which focused on the health effects of lottery prizes in Western European countries with strong social safety nets, do not find positive effects other than those on mental health. By contrast, the current study contributes to the literature by providing new evidence of the positive health effect of income via lottery wins in a country without strong social safety nets.

Original language	English
Article number	102414
Journal	Journal of Health Economics
Volume	76
DOIs	https://doi.org/10.1016/j.jhealeco.2020.102414
Publication status	Published - 2021 Mar

Keywords

Health
I10
J24
Lottery prize
Unearned income

ASJC Scopus subject areas

Health Policy
Public Health, Environmental and Occupational Health

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jhealeco.2020.102414

Cite this

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AB - We estimate the causal effects of household income on self-reported health status by exploiting random variations in the amount of lottery prizes won. We find that a S$10,000 (US$7,245) increase in income via lottery wins improves individuals’ health by a standard deviation of 0.18. As possible mechanisms, we find that lottery wins increase household consumption spending and improve overall life satisfaction, but do not change healthcare spending, labor supply, and risky health behavior. Previous studies, which focused on the health effects of lottery prizes in Western European countries with strong social safety nets, do not find positive effects other than those on mental health. By contrast, the current study contributes to the literature by providing new evidence of the positive health effect of income via lottery wins in a country without strong social safety nets.

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The effects of income on health: Evidence from lottery wins in Singapore

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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