Why Winning Powerball Won’t Make You Happy
Would winning the $500 million Powerball jackpot tonight make you happy? Studies and anecdotal accounts of lottery winners suggest that joy is by no means assured. Though there are stories of people whose lives improved after landing a big lottery pay-out, there are seemingly as many winners whose lives got worse.
Academic research on the subject is mixed.
The most frequently-cited study was published back in 1978 in the Journal of Personality and Social Psychology. Researchers interviewed Illinois State Lottery winners and compared them with non-winners and with people who had suffered a terrible accident that left them paraplegic or quadriplegic. Each group answered a series of questions aimed at measuring their happiness level.
The study found that the overall happiness levels of lottery winners spiked when they won, but returned to pre-winning levels after just a few months. In terms of overall happiness, the lottery winners were not significantly happier than the non-winners. The accident victims were slightly less happy, but not by much. The study showed that most people have a set level of happiness and that even after life-changing events, people tend to return to that set point.
A March Wall Street Journal story recounts three other relevant studies that lend some support to the notion that a lottery win could make you happier:
A 2006 British study in the Journal of Health Economics found that U.K. lottery winners go on to demonstrate “significantly better psychological health.” That study also found that the general mental well-being of winners vastly improved.
A study in Florida showed that about 1% of lottery winners go bankrupt every year. That’s roughly twice the average for the general population. But the study looked only at winners of $150,000 or less. It doesn’t really apply to the $500 million drawing tonight. Among those in the study, people who won six-figure prizes were less likely to go bankrupt.
A British study showed that winners spent 44% of their lottery winnings after five years, but only a few spent their entire winnings in their lifetime. Again it depended on the amount people won.
One other study: a 2008 University of California, Santa Barbara paper that measured people’s happiness six months after winning a modest lottery prize in Holland, equivalent to eight months’ worth of income. That study found that the win had no effect on happiness.
The takeaway: sudden wealth is most likely to exaggerate your current situation, but it won’t fundamentally change your sense of well-being. If you’re unhappy, you’re not good at managing money and you’re surrounded by people you don’t trust, a big win will probably make your problems worse. If you feel fulfilled, you are a careful financial planner and you have strong relationships in your life, a lottery win is likely to build on those strengths.
Cautionary tales abound. Like Jack Whittaker, a West Virginia man who won a $315 million Powerball jackpot back in 2002. At first he gave millions to charity, including $14 million to start his own foundation. But later, a briefcase with $545,000 in cash and cashier’s checks was taken from his car while it was parked outside a strip club. His office and home were broken into and he was arrested twice for drunk driving. His granddaughter died under suspicious circumstances and by 2007, he had spent most of his money. He told reporters, “I wish I’d torn that ticket up.”
There was Alex Toth, a Florida man who won $13 million in 1990. By the time he died in 2008, he had split with his wife and he faced fraudulent tax return charges.
There was also Evelyn Baseshore of New Jersey, a former convenience store manager who won twice, taking away a total of $5 million in the mid-1980s. She was confronted by people who wanted a share of her money. “Everybody had their hand out,” she is quoted as saying.
In 2007, a paper published in the Journal of Academic Psychology asked why achieving major life goals, including winning the lottery, or the more basic goal of getting married, doesn’t wind up making us as happy as we expect. As the 1978 student showed, a big positive event like a lottery win can impact happiness, but its effects diminish over time Why? Because while a lottery win can make a difference, it won’t affect the other conditions of your life, like who your siblings or parents are or your basic disposition.
That said, there are lottery winners whose lives have definitely improved. One example: Sandra Hayes, a social worker who was making $25,000 a year when she and 12 of her coworkers won the $224 million Powerball jackpot in 2006. After taxes and splitting the money with her colleagues, she had $10 million. She bought a Lexus , her dream car, a half million dollar house in St. Louis, and she paid off her current home and gave it to her daughter and grandchildren who had been living in a downtrodden neighborhood. She quit her job, started writing and published a book. But Hayes agrees that the win didn’t transform her outlook on life. “Just because you win the lottery, it does not change you as a person,” she told NBC News.Would winning the $500 million Powerball jackpot tonight make you happy? Studies and anecdotal accounts of lottery winners suggest that joy is by no means assured. Though there are stories of people whose lives improved after landing a big lottery pay-out, there are seemingly as many winners whose lives got […] ]]>