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If you want to estimate causal effects you need a randomly assigned treatment. When studying the effects of wealth a lottery gives you exactly that. The critiq

by efxhoy 4y ago

If you want to estimate causal effects you need a randomly assigned treatment. When studying the effects of wealth a lottery gives you exactly that. The critique would be that the findings don’t necessarily generalize outside of the lottery participating population, but why wouldn’t they?

behnamoh 4y ago
The mindset matters imo. Someone who worked their a$$ off to accumulate wealth has a totally different perspective to life compared to someone who won lottery.
mekkkkkk 4y ago
> but why wouldn’t they? Well, could be that the lottery participating population has less than average satisfaction of their current life situation. Seems reasonable.
hn_throwaway_99 4y ago
> The critique would be that the findings don’t necessarily generalize outside of the lottery participating population, but why wouldn’t they? Because normally when people earn their wealth, they build up a whole set of experiences and social networks that assist them in managing their wealth. Contrarily, winning the lottery has often been reported as "the worst thing that can happen to you", and lottery winners are frequently broke in a few years: https://www.ngpf.org/blog/question-of-the-day/question-of-the-day-what-percent-of-lottery-winners-eventually-go-bankrupt/ https://www.ngpf.org/blog/question-of-the-day/question-of-th...
- vintermann 4y ago
  If so, lottery winners are still useful for disentangling the effect that presumably comes from the wealth itself. Yes it's not entirely random who wins (not all play the lottery, not all play it equally much), but it's a lot more random than other ways to wealth.
frostburg 4y ago
Lottery partecipants are more likely to be mathematically illiterate.
- huitzitziltzin 4y ago
  Not in one of the three main cases considered here. This is the Swedish “save to win” system - the number of lottery tickets depends on your bank account balance. (The other two cases for which they have data are more conventional lotteries.)
  - lapsis_beeftech 4y ago
    I had one of those accounts and it was very much a lottery and not something a financially literate person would open.
noughtme 4y ago
> If you want to estimate causal effects you need a randomly assigned treatment. When studying the effects of wealth a lottery gives you exactly that. It gives you exactly the opposite of that. How many financially prudent individuals do you know who buy lottery tickets? It is not a representative sample.
- huitzitziltzin 4y ago
  Not a good criticism of this paper in particular. Read the details of the “save to win” program in the Data section. Save to win was not a conventional lottery program. (Two more conventional lottery programs are also included for which your criticism is more accurate.)
  - noughtme 4y ago
    Unless I misunderstand, all three lottery programs studied are voluntary. Kombi subscription lottery, Triss scratch and win, and Prize Linked Savings Account (PLSA) are all voluntary, and therefore not representative of the general population.

by efxhoy 4y ago

behnamoh 4y ago

The mindset matters imo. Someone who worked their a$$ off to accumulate wealth has a totally different perspective to life compared to someone who won lottery.

mekkkkkk 4y ago

> but why wouldn’t they? Well, could be that the lottery participating population has less than average satisfaction of their current life situation. Seems reasonable.

hn_throwaway_99 4y ago

> The critique would be that the findings don’t necessarily generalize outside of the lottery participating population, but why wouldn’t they? Because normally when people earn their wealth, they build up a whole set of experiences and social networks that assist them in managing their wealth. Contrarily, winning the lottery has often been reported as "the worst thing that can happen to you", and lottery winners are frequently broke in a few years: https://www.ngpf.org/blog/question-of-the-day/question-of-the-day-what-percent-of-lottery-winners-eventually-go-bankrupt/ https://www.ngpf.org/blog/question-of-the-day/question-of-th...

vintermann 4y ago
If so, lottery winners are still useful for disentangling the effect that presumably comes from the wealth itself. Yes it's not entirely random who wins (not all play the lottery, not all play it equally much), but it's a lot more random than other ways to wealth.

frostburg 4y ago

Lottery partecipants are more likely to be mathematically illiterate.

huitzitziltzin 4y ago
Not in one of the three main cases considered here. This is the Swedish “save to win” system - the number of lottery tickets depends on your bank account balance. (The other two cases for which they have data are more conventional lotteries.)
- lapsis_beeftech 4y ago
  I had one of those accounts and it was very much a lottery and not something a financially literate person would open.

noughtme 4y ago

> If you want to estimate causal effects you need a randomly assigned treatment. When studying the effects of wealth a lottery gives you exactly that. It gives you exactly the opposite of that. How many financially prudent individuals do you know who buy lottery tickets? It is not a representative sample.

huitzitziltzin 4y ago
Not a good criticism of this paper in particular. Read the details of the “save to win” program in the Data section. Save to win was not a conventional lottery program. (Two more conventional lottery programs are also included for which your criticism is more accurate.)
- noughtme 4y ago
  Unless I misunderstand, all three lottery programs studied are voluntary. Kombi subscription lottery, Triss scratch and win, and Prize Linked Savings Account (PLSA) are all voluntary, and therefore not representative of the general population.