When a Town Wins the Lottery: Evidence from Spain

54 Pages Posted: 18 Nov 2021 Last revised: 15 Nov 2022

See all articles by Christina Kent

Christina Kent

Stanford University - Department of Economics

Alejandro Martínez-Marquina

University of Southern California - Marshall School of Business

Date Written: November 10, 2021

Abstract

For over a century, Spain has conducted a national lottery which often results in the random allocation of large cash windfalls to one town. Leveraging data on lottery ticket expenditures, we match winning towns to non-winning towns with equal winning probability. For towns that won in recent decades, consumption of durables increases while employment, businesses, and migration
to the town decrease. An analysis of a century of winners reveals a stark and persistent population increase for towns that won after the Civil War. Our results suggest a limited role for wealth shocks in spurring economic growth outside of large recessions.

Keywords: Wealth shocks, economic recession, randomized natural experiment

JEL Classification: N33,J11,H31

Suggested Citation

Kent, Christina and Martínez-Marquina, Alejandro, When a Town Wins the Lottery: Evidence from Spain (November 10, 2021). Available at SSRN: https://ssrn.com/abstract=3960784 or http://dx.doi.org/10.2139/ssrn.3960784

Christina Kent

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
STANFORD, CA 94305-6072
United States

Alejandro Martínez-Marquina (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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