Lottery Prizes Research Articles

An Experiment Evaluating the Impact of Large-Scale, High-Payoff Vaccine Regret Lotteries

Lotteries have been shown to motivate behavior change in many settings. However, the value of large-scale, geographically-targeted lotteries as a policy tool for changing the behaviors of entire populations is a matter of heated debate. In mid-2021, we implemented a pre-registered, city-wide experiment in Philadelphia to test the effects of three, high-payoff (up to $50,000) geographically-targeted lotteries designed to motivate adult residents of Philadelphia to get vaccinated against COVID-19. All Philadelphia residents ages 18 and older were eligible for inclusion in each drawing but, if selected, could not accept a prize unless they had received at least one dose of a COVID-19 vaccine. In each drawing, residents of a randomly selected “treatment” zip code received half of the 12 lottery prizes (boosting their chances of a win to 50-100x those of other Philadelphians). This experimental design makes possible a causal estimate of the impact of vastly increasing people’s odds of winning a vaccine lottery. We estimate that the first treated zip code, which drew considerable media attention, may have experienced a small bump in vaccinations compared to control zip codes: vaccinations rose by an estimated 61 per 100,000 people (an 11% increase). Pooling results from all three zip codes treated over the course of our six-week experiment, however, we do not detect any overall benefits. This unsustained effect may be because media attention waned, salience of the lottery declined, or attitudes about vaccination became increasingly entrenched over time. Further, our 95% confidence interval provides an upper bound on the overall benefits of treatment in our study of 9%. Given that lotteries of this scale cost hundreds of thousands of dollars to implement, the lack of a substantial benefit from this experiment strengthens the policy case for other, more impactful ways to encourage health behavior change.

The effects of income on health: Evidence from lottery wins in Singapore

We estimate the causal effects of household income on self-reported health status by exploiting random variations in the amount of lottery prizes won. We find that a S$10,000 (US$7,245) increase in income via lottery wins improves individuals’ health by a standard deviation of 0.18. As possible mechanisms, we find that lottery wins increase household consumption spending and improve overall life satisfaction, but do not change healthcare spending, labor supply, and risky health behavior. Previous studies, which focused on the health effects of lottery prizes in Western European countries with strong social safety nets, do not find positive effects other than those on mental health. By contrast, the current study contributes to the literature by providing new evidence of the positive health effect of income via lottery wins in a country without strong social safety nets.

Windfall gains and stock market participation

We exploit the randomized assignment of lottery prizes in a large administrative Swedish data set to estimate the causal effect of wealth on stock market participation. A $150,000 windfall gain increases the stock market participation probability by 12 percentage points among prelottery nonparticipants but has no discernible effect on prelottery stock owners. A structural life cycle model significantly overpredicts entry rates even for very high entry costs (up to $31,000). Additional analyses implicate pessimistic beliefs regarding equity returns as a major source of this overprediction and suggest that both recent and early-life return realizations affect beliefs.

Lottery incentives have short-term impact on ART initiation among men: results from a randomized pilot study.

IntroductionAmong people living with HIV in South Africa, viral suppression is lower among men than women. The study aim was to test the impact of lottery incentives, which reward positive health choice (e.g. antiretroviral therapy (ART) linkage) with a chance to win a prize, on strengthening the HIV care continuum including ART initiation and viral suppression for men.MethodsWe conducted a randomized, prospective trial of lottery incentives in the context of HIV testing and linkage to ART in rural KwaZulu‐Natal, South Africa. Men living with HIV were randomly allocated to: lottery incentives and motivational text messages or motivational text messages only. Lottery prize eligibility was conditional on clinic registration, ART initiation, or viral suppression by one, three and six months respectively. After completing each continuum step, participants in the lottery group were notified whether they had won and were encouraged to continue in care. Lottery prizes were either a mobile phone, data or a gift card (valued at R1000/$100). Kaplan–Meier curves were plotted to determine time to ART initiation by study group. The primary outcome was viral suppression at six months.ResultsBetween November 2017 and December 2018, we tested 740 men for HIV and enrolled 131 HIV‐positive men who reported not being on ART. At baseline, 100 (76%) participants were 30 years and older, 95 (73%) were unemployed and the median CD4 count was 472 cells/μL. At study exit, 84% (110/131) of participants had visited a clinic and 62% (81/131) were virally suppressed. Compared to motivational text messages, lottery incentives decreased the median time to ART initiation from 126 to 66 days (p = 0.0043, age‐adjusted Cox regression) among all participants, and, from 134 days to 20 days (p = 0.0077) among participants who were not virally suppressed at baseline. Lottery incentives had an inconclusive effect on clinic registration (RR = 1.21, 95% CI: 0.83 to 1.76) and on viral suppression at six months (RR = 1.13, 95% CI: 0.73 to 1.75) compared to motivational text messages.ConclusionsConditional lottery incentives shortened the time to ART initiation among South African men. Behavioural economics strategies strengthen linkage to ART, but the study power was limited to see an impact on viral suppression.Clinical Trial NumberNCT03808194.

Association Between Lottery Prize Size and Self-reported Health Habits in Swedish Lottery Players

Poor health and unhealthy lifestyles are substantially more prevalent among individuals with low income than among individuals with high income, but the underlying mechanisms are not well understood. To evaluate whether changes to unearned wealth from lotteries are associated with long-term health behaviors and overall health. In this quasi-experimental cohort study, 4820 participants (aged 18-70 years at the time of winning) in 3 Swedish lotteries were surveyed from September 1, 2016, to November 11, 2016, between 5 and 22 years after a lottery event. Outcomes of participants in the same lottery who were randomly assigned prizes of different magnitudes by the lotteries but were ex ante identical in terms of their probability of winning different prizes were compared. Data were analyzed from December 22, 2016, to November 21, 2019. Lottery prizes ranged from $0 for nonwinning players to $1.6 million. Four lifestyle factors (smoking, alcohol consumption, physical activity, and a healthy diet index) and 2 measures of overall health (subjective health and an index of total health derived from responses to questions about 35 health conditions). The survey was returned by 3344 of 4820 individuals (69%; 1722 [51.5%] male), which corresponded to 3362 observations. The mean (SD) age was 48 (11.8) years in the year of the lottery win and 60 (11.0) years at the time of the survey. There were no statistically significant associations between prize amount won and any of the 6 long-term health outcomes. Estimated associations expressed in SD units per $100 000 won were as follows: smoking (-0.006, 95% CI, -0.038 to 0.026); alcohol consumption (0.003, 95% CI, -0.027 to 0.033); physical activity (0.001, 95% CI, -0.029 to 0.032); dietary quality (-0.007, 95% CI, -0.040 to 0.026); subjective health (0.013, 95% CI, -0.017 to 0.043); and index of total health (-0.003, 95% CI, -0.033 to 0.027). In this study of Swedish lottery players, unearned wealth from random lottery prize winnings was not associated with subsequent healthy lifestyle factors or overall health. The findings suggest that large, random transfers of unearned wealth are unlikely to be associated with large, long-term changes in health habits or overall health.

Behavioral Economics Incentives to Support HIV Treatment Adherence (BEST): Protocol for a randomized controlled trial in Uganda

BackgroundMany HIV-positive patients do not appropriately adhere to their antiretroviral medication (ART). This leads to higher viral loads and greater probability of HIV transmission. Present bias—a tendency to give in to short-term temptations at the expense of long-term outcomes—is a potential driver of low adherence. In this study we test a novel intervention rooted in behavioral economics that is designed to overcome present bias and increase ART adherence.Methods/designWe will enroll 330 HIV-positive patients at Mildmay Hospital in Kampala, Uganda, into a 2-year randomized controlled trial. Participants will be randomized to one of three groups. The first intervention group (T1, n = 110) will be eligible for small lottery prizes based on timely clinic visits and demonstration of viral suppression. Group 2 (T2, n = 110) will be eligible for the same lottery prizes conditional on high adherence measured by a medication event management system (MEMS) cap. The control group (n = 110) will receive the usual standard of care. Adherence will be measured continuously throughout the intervention period and for 12 months post-intervention to evaluate effect persistence. Surveys will be conducted at baseline and then every 6 months. Viral loads will be measured annually. Primary outcomes are whether the viral load is detectable and MEMS-measured adherence. Secondary outcomes are the log-transformed viral load as a continuous measure and a binary measure for whether the person took at least 90% of their ART pills.DiscussionOur study is one of the first to investigate the effectiveness of lottery incentives for improving ART adherence, and in addition, it compares the relative efficacy of using electronically measured adherence versus viral load to determine lottery eligibility. MEMS caps are relatively costly, whereas viral load testing is now part of routine clinical care in Uganda. BEST will test whether directly incentivizing viral suppression (which can be implemented using readily available clinic data) is as effective as incentivizing electronically measured adherence. Cost-effectiveness analyses of the two implementation modes will also be performed.Trial registrationClinicalTrials.gov, NCT03494777. Registered on 11 April 2018.

MPC Heterogeneity and Household Balance Sheets

Using Norwegian administrative data, we study how sizable lottery prizes affect household expenditure and savings. Expenditure responses (MPCs) spike in the year of winning, with a mean estimate of 0.35, and thereafter fall markedly. Controlling for all items on the household balance sheet and characteristics such as education and age, MPCs vary with the amount won and liquid assets only. Shock size matters: The MPC among the 25 percent winning least is twice as high as among the 25 percent winning most. Many households are wealthy, illiquid and have high MPCs, consistent with 2-asset models of consumer choice.

MPC Heterogeneity and Household Balance Sheets

We use sizeable lottery prizes in Norwegian administrative panel data to characterize households’ marginal propensities to consume (MPCs). Our main contribution is to document how MPCs vary with household characteristics and prize size, and how lottery prizes are spent and saved over time. We find that spending spikes in the year of winning, and reverts to normal within 5 years. Controlling for all items on households’ balance sheets and characteristics such as education and income, it is the amount won, age and liquid assets that vary systematically with MPCs. Low-liquidity winners of the smallest prizes (around USD 1,500) are estimated to spend all within the year of winning. The same estimate for high-liquidity winners of large prizes (USD 8,300-150,000) is slightly below one half. While conventional models will struggle to account for such high MPC levels, we show that a two-asset life-cycle model with a realistic earnings profile and a luxury bequest motive can account for both the time profile of consumption responses and their systematic co-variation with observables.

An Empirical Investigation Of The Impact Of Bank Lottery Prizes On Bank Performances

An Empirical Investigation Of The Impact Of Bank Lottery Prizes On Bank Performances

Fair e-lottery system proposal based on anonymous signatures

ABSTRACTThe games in which large amount of money is involved are always called into question about the existence of the possibility to manipulate the game for an immediate benefit. Lottery system is not an exception in this regard; moreover, it is a subject of rumours that the game is not as fair as it is pretended to be. After studying the advantages and drawbacks of conventional lottery systems, the authors are proposing an e-lottery system based on anonymous signatures. Even though the proposal is using electronic signatures, which imply complex calculus and the possession of digital certificates for each player, the proposed system compensates these drawbacks by increasing trust and confidence of both the players and the lottery organizer. This will lead to more players participating in the lottery, which translates to more revenue for the lottery and larger prizes for the players.

Systematic review of the effect of economic compensation and incentives on uptake of voluntary medical male circumcision among men in sub-Saharan Africa

ABSTRACTVoluntary medical male circumcision (VMMC) prevalence in priority countries in sub-Saharan Africa, particularly among men aged ≥20 years, has not yet reached the goal of 80% coverage recommended by the World Health Organization. Determining novel strategies to increase VMMC uptake among men ≥20 years is critical to reach HIV epidemic control. We conducted a systematic review to analyze the effectiveness of economic compensation and incentives to increase VMMC uptake among older men in order to inform VMMC demand creation programs. The review included five qualitative, quantitative, and mixed methods studies published in peer reviewed journals. Data was extracted into a study summary table, and tables synthesizing study characteristics and results. Results indicate that cash reimbursements for transportation and food vouchers of small nominal amounts to partially compensate for wage loss were effective, while enrollment into lotteries offering prizes were not. Economic compensation provided a final push toward VMMC uptake for men who had already been considering undergoing circumcision. This was in settings with high circumcision prevalence brought by various VMMC demand creation strategies. Lottery prizes offered in the studies did not appear to help overcome barriers to access VMMC and qualitative evidence suggests this may partially explain why they were not effective. Economic compensation may help to increase VMMC uptake in priority countries with high circumcision prevalence when it addresses barriers to uptake. Ethical considerations, sustainability, and possible externalities should be carefully analyzed in countries considering economic compensation as an additional strategy to increase VMMC uptake.

Labour Supply Effects of Winning a Lottery

Our article investigates how winning a substantial lottery prize affects labour supply. Analysing data from Dutch State Lottery winners, we find that winning a lottery prize reduces labour earnings in the year of the winning, as well as in the years after the winning. This suggests that winning a lottery prize makes one work fewer hours. The effects are small but statistically significant. We do not find a significant effect of lottery prizes on the probability of being employed.

Ride Your Luck! A Field Experiment on Lottery-Based Incentives for Compliance

In a field experiment, we studied the performance of an incentive scheme that combines a lottery-based reward for compliance with probabilistic sanctions for noncompliance. For one month, bus passengers who purchased a ticket on board a subset of buses operating in a medium-sized Italian city participated in a lottery awarding a €500 prize. The remaining buses—otherwise identical—were used as controls. We observed the amount of tickets sold on treated and control buses over three months, before, during, and after the introduction of the lottery. Results show that treated buses sold significantly more on-board tickets than control buses during the lottery period. In our setup, the estimated extra revenues from the ticket sales caused by the introduction of the lottery fell short of the amount of the total prizes raffled off. However, the incentive scheme proved cost-effective because not all the lottery prizes were claimed by winners. This paper was accepted by Uri Gneezy, behavioral economics.

The numerics of Premium Bonds

Premium Bonds sold by the UK National Savings and Investments (NS&I) agency are the possibly most popular example of lottery bonds. Premium Bonds holders renounce interest payments but instead participate in a lottery which distributes the equivalent of aggregate interest payments among them. While the random mechanism used in the lottery is well-documented the details of how to determine the probability distribution of a single bond holder's lottery prizes seem to be less well-known. We observe that the lottery prizes distribution is a multivariate hypergeometric distribution and discuss how to exactly calculate its probability masses as well as how to approximate the distribution by means of the Panjer recursion and Fourier transforms. We find that there are good reasons to prefer the approximations based on Panjer recursionor Fourier transforms to exact calculation of the lottery prize value distribution.

Ride Your Luck! A Field Experiment on Lottery-Based Incentives for Compliance

We designed a natural-field experiment in the context of local public transportation to test whether rewards in the form of lottery prizes coupled with traditional sanctions efficiently reduce free-riding. We organized a lottery in a medium-size Italian city the participation in which is linked to purchasing an on-board bus ticket. The lottery was then implemented in half of otherwise identical buses operating in the municipality. Our theoretical model shows that the introduction of the lottery generates an increase in the number of tickets sold and that it is possible to design a self-financing lottery. To estimate the effect of the lottery’s introduction on the amount of tickets sold, we matched and compared treated and control buses operating on the same day on the exact same route. The results show that buses participating in the lottery sold significantly more tickets than the control buses. The increase in revenue from the tickets sold was more than the lottery prize amount.

Banks offer lottery prizes: what are the implications

The primary goal of this interdisciplinary paper is to examine whether or not the adoption of depositor-focused marketing tool (Lottery prizes) pays in the Jordanian banking system. The fact that about half of the commercial banks offer lottery (cash) prizes to their customers (depositors), it would be interesting for academics in finance and marketing, bank managers, and bank shareholders, to examine the impact of this marketing policy on the performance of this sector in terms of return on assets and net interest margin. Based on a total of thirteen (13) Jordanian commercial banks and the time period 2002-2012, the results indicate that lottery prizes have a positive and significant impact on the accounting performance of banks. However, this positive impact comes at the expense of bank efficiency. In other words, it is concluded that the extra “cost” incurred by banks that offer cash prizes are “passed on” to their customers in the form of wider net interest margin.

Sentimental relationships between lottery participation and household consumption

This study examines the sentimental correlation of lottery prizes with household consumption via Grey relational analysis. An approximate correlation with sequential order rankings is identified. Results demonstrate that all top five lottery prizes are strongly correlated with rational addictive consumption and income categories. These lottery prizes show a relatively strong correlation with entertainment consumption and a negligible correlation with desperation consumption. Although jackpot exhibits an approximate strong correlation with alcohol consumption, other prizes show an approximate strong correlation with tobacco consumption. The top five prizes demonstrate a relatively strong correlation with restaurant, recreation, and traveling consumption, as well as a negligible correlation with food and education consumption. Lottery prizes are negligibly correlated with salary with the least sentiment.

Shaping tax norms through lotteries

This work develops a theoretical framework for a behavioral policy against indirect tax evasion that is complementary to the classical deterrence approach. The policy provides incentives to customers in the form of lottery prizes in order to act as third-party tax enforcers. I argue that the policy introduction might successfully overcome the free-riding problem characterizing third-party tax enforcement. A theoretical model based on Tversky and Kahneman's (1992) Cumulative Prospect Theory is presented. The model states the necessary conditions for an effective policy implementation.

The Numerics of Premium Bonds

Premium Bonds sold by the UK National Savings and Investments (NS&I) agency are the possibly most popular example of lottery bonds. Premium Bonds holders renounce interest payments but instead participate in a lottery which distributes the equivalent of aggregate interest payments among them. While the random mechanism used in the lottery is well-documented the details of how to determine the probability distribution of a single bond holder's lottery prizes seem to be less well-known. We observe that the lottery prizes distribution is a multivariate hypergeometric distribution and discuss how to exactly calculate its probability masses as well as how to approximate the distribution by means of the Panjer recursion and Fourier transforms. We find that there are good reasons to prefer the approximations based on Panjer recursion or Fourier transforms to exact calculation of the lottery prize value distribution.

Labor Supply Effects of Winning a Lottery

This paper investigates how winning a substantial lottery prize affects labor supply. Analyzing data from Dutch State Lottery winners, we find that earnings are affected but not employment. Lottery prize winners reduce their hours of work but they are not very likely to withdraw from the labor force. We also find that the effects of lottery prizes last for several years and materialize predominantly among young single individuals without children.