Abstract

http://ssrn.com/abstract=1324845
 
 

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The Ticket to Easy Street? The Financial Consequences of Winning the Lottery


Scott Hankins


University of Kentucky

Mark Hoekstra


University of Pittsburgh - Department of Economics

Paige Marta Skiba


Vanderbilt University - Law School

March 26, 2010

Vanderbilt Law and Economics Research Paper No. 10-12

Abstract:     
This paper examines whether giving large cash transfers to financially distressed people causes them to avoid bankruptcy. A comparison of Florida Lottery winners who randomly received $50,000 to $150,000 to small winners indicates that such transfers only postpone bankruptcy rather than prevent it, a result inconsistent with the negative shock model of bankruptcy. Furthermore, the large winners who subsequently filed for bankruptcy had similar net assets and unsecured debt as small winners. Thus, our findings suggest that skepticism regarding the long-term impact of cash transfers may be warranted.

Number of Pages in PDF File: 28

Keywords: Lottery; Bankruptcy; Consumer Behavior

JEL Classification: D14; K35; D12

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Date posted: January 9, 2009 ; Last revised: June 24, 2010

Suggested Citation

Hankins, Scott and Hoekstra, Mark and Skiba, Paige Marta, The Ticket to Easy Street? The Financial Consequences of Winning the Lottery (March 26, 2010). Vanderbilt Law and Economics Research Paper No. 10-12. Available at SSRN: http://ssrn.com/abstract=1324845 or http://dx.doi.org/10.2139/ssrn.1324845

Contact Information

Scott Hankins
University of Kentucky ( email )
121 Washington Ave, 105
Lexington, KY 40536-0003
United States
Mark Hoekstra
University of Pittsburgh - Department of Economics ( email )
4714 Posvar Hall
230 S. Bouquet Street
Pittsburgh, PA 15260
United States
HOME PAGE: http://www.econ.pitt.edu/facpage.php?uid=108
Paige Marta Skiba (Contact Author)
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
615-322-1958 (Phone)
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