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

Seonghoon Kim, Kanghyock Koh

Research output: Contribution to journalArticlepeer-review

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 languageEnglish
Article number102414
JournalJournal of Health Economics
Volume76
DOIs
Publication statusPublished - 2021 Mar

Keywords

  • Health
  • I10
  • J24
  • Lottery prize
  • Unearned income

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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