Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229556 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8738
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
Although lower income is associated with overweight (and obesity), such an association is explained by a number of other confounding effects such as omitted variables (e.g., time preferences) explaining that income effect on overweight. We study the effect of unearned income shocks resulting from a lottery win (windfall income) on both overweight (alongside obesity and body mass index) distribution. We draw upon longitudinal data from the United Kingdom, a country where about half of a population plays the lottery. Our results suggest no evidence of contemporaneous effects of income on overweight, but a significant lagged effect. We find a reduction in overweight 12 months after a lottery win. A 10,000-sterling win reduces overweight by 2-3 percentage points. Furthermore, we document a nonlinear effect up to 36 months after the lottery win, suggesting that small wins increase overweight and large wins reduce it. The effect of a lottery win varies depending on an individual’s working hours and educational attainment. A lottery win among low education individuals decreases the risk of overweight.
Subjects: 
obesity
overweight
income
windfall income
lottery wins
body mass index (BMI)
JEL: 
I12
I18
J30
Document Type: 
Working Paper
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