Robert Östling

The rich tend to support policies favoring the affluent and are over-represented among both voters and legislators. This paper investigates whether these correlations reflect causal effects of wealth by leveraging random, positive wealth shocks in the form of lottery prizes. Compared to suitably matched controls, large-prize winners are no more likely to cast votes in national elections or run for political office. We also find no significant effects of parents’ lottery winnings on their children’s political participation. But winners of large lottery prizes become more negative toward taxes on wealth, real estate and inheritances. Although we do not detect any statistically significant effects on other political preferences, effects tend to go in the direction of a more right-wing political orientation. We find no evidence that lottery wealth changes moral values or strengthen beliefs in the importance of hard work for success in life.

We estimate the effects of large, positive wealth shocks on marriage and fertility in a sample of Swedish lottery players. For male winners, wealth increases marriage formation and reduces divorce risk, suggesting wealth increases men’s attractiveness as prospective and current partners. Wealth also increases male fertility. The only discernible effect on female winners is that wealth increases their short-run (but not long-run) divorce risk. Our results for divorce are consistent with a model where the wealthier spouse retains most of his/her wealth in divorce. In support of this assumption, we show divorce settlements in Sweden often favor the richer spouse.

År 2021 tilldelades professorerna Erik Lindqvist och Robert Östling Assar Lindbeck-medaljen. Medaljen delas ut vartannat år av Nationalekonomiska Föreningen, genom stiftelsen Assar Lindbeck-medaljen, till i Sverige verksamma forskare under 45 år som gett ett signifikant bidrag till ekonomiskt tänkande och ekonomisk kunskap. Den här artikeln baseras på pristagarnas föreläsning som hölls i samband med att medaljen delades ut under Nationella konferensen i nationalekonomi den 11 november 2022. Artikeln sammanfattar ett antal uppmärksammade studier om hur plötslig rikedom, i form av lotterivinster, påverkar exempelvis individers arbetskraftsutbud, hälsa och upplevda välbefinnande.

Erik Angners bok How Economics Can Save the World: Simple Ideas to Solve Our Biggest Problems är något så ovanligt som en hyllning till nationalekonomin skriven av en professor i filosofi. När jag läser boken blir jag å min disciplins vägnar smickrad, men också lite besvärad. Känslan som infinner sig vid läsningen påminner om att läsa ett mäklarprospekt om sitt eget hem. Lite som bilden på den fantastiska utsikten mot sjön som i själva verket bara är en sjöglimt som syns vintertid från andra våningen.

There is a well-established negative gradient between economic status and crime, but its underlying causal mechanisms are not well understood. We use data on four Swedish lotteries matched to data on criminal convictions to gauge the causal effect of financial windfalls on player`s own crime and their children`s delinquency. We estimate a positive but statistically insignificant effect of lottery wealth on players`own conviction risk. Our estimates allows us to rule out effects one fifth as large as the cross-sectional gradient between income and crime. We also estimate a less precise null effect of parental lottery wealth on child delinquency.

We investigate the impact of financial windfalls on household portfolio choices and risk exposure. Exploiting the randomized assignment of lottery prizes in three Swedish lotteries, we find a windfall gain of $100K leads to a 5-percentage-point de- crease in the risky share of household portfolios. We show theoretically that negative wealth effects are consistent with both constant and decreasing relative risk aversion and analyze how our empirical estimates help distinguish between competing models of portfolio choice. We further show our results are quantitatively aligned with the predictions of a calibrated dynamic portfolio choice model with nontradable human capital and consumption habits.

There is a well-established negative gradient between economic status and crime, but its underlying causal mechanisms are not well understood. We use data on four Swedish lotteries matched to data on criminal convictions to gauge the causal effect of financial windfalls on player’s own crime and their children’s delinquency. Weestimate a positive but statistically insignificant effect of lottery wealth on players’ own conviction risk. Our estimates allow us to rule out effects one fifth as large as the cross-sectional gradient between income and crime. We also estimate a less precise null effect of parental lottery wealth on child delinquency.

We investigate the impact of financial windfalls on household portfolio choices and risk exposure. Exploiting the randomized assignment of lottery prizes in three Swedish lotteries, we find a windfall gain of $100K leads to a 5-percentage-point decrease in the risky share of household portfolios. We show theoretically that negative wealth effects are consistent with both constant and decreasing relative risk aversion and analyze how our empirical estimates help distinguish between competing models of portfolio choice. We further show our results are quantitatively aligned with the predictions of a calibrated dynamic portfolio choice model with non-tradable human capital and consumption habits.

We estimate the effects of large, positive wealth shocks on marriage and fertility in a sample of Swedish lottery players. For male winners, wealth increases marriage formation and reduces divorce risk, suggesting wealth increases men’s attractiveness as prospective and current partners. Wealth also increases male fertility. The only discernible effect on female winners is that wealth increases their short-run (but not long-run) divorce risk. Our results for divorce are consistent with a model where the wealthier spouse retains most of his/her wealth in divorce. In support of this assumption, we show divorce settlements in Sweden often favor the richer spouse.