Lottery winners do not go broke

Lindqvist, Östling and Cesarini, Review of Economic Studies 2020. Over 2,500 Swedish winners, surveyed 5 to 22 years after the win, pre-registered methods, matched controls. Prizes up to $2 million, average around $106,000.

What they found:

Life satisfaction rose and stayed up for more than a decade, with no sign of fading. That is the opposite of the standard hedonic treadmill story.

Happiness barely moved. Day-to-day mood, smiling, laughing, mental health, all effectively unchanged.

No collapse. Cesarini says squandering it is rare. Winners worked slightly less, spent sensibly, and put a large share into low-risk bonds rather than equities.

No improvement in health, relationships, housing or neighbourhood satisfaction. The gain was concentrated almost entirely in financial satisfaction, which then lifted overall life satisfaction.

So the honest headline: money did not make them happier, it made them less worried, permanently. And the broke-lottery-winner story is American tabloid folklore, not data.