The easing of COVID-19 restrictions has resulted in people in Singapore spending more money on lottery tickets. According to the Tote Board’s last financial year results, lottery and sports wagers topped SGD9.2 billion (US$6.8 billion). The Singapore Pools’ numbers game TOTO, number pre-printed lottery game 4D, and the Singapore Sweep all have jackpot prizes over a million dollars.
A Gojek driver who requested anonymity said he bets up to $400 per week on football matches using Singapore Pools. He usually places his bets on Premier League games, but is also betting on World Cup matches. “I like to gamble with my friends,” he said. “I don’t mind losing money, but I don’t want to spend more than what I can afford to lose.”
Our recent paper using SLP data finds that a $10,000 increase in unearned income from lottery winnings significantly improves households’ self-reported overall life satisfaction and happiness. We use a novel method to identify the impact of lottery expenditures, which has previously been overlooked in happiness and life satisfaction studies. Specifically, we insert a variable that accounts for individuals’ lottery expenditures into both naive and instrumental variables estimates of happiness and life satisfaction. This makes it possible to disentangle the effects of other factors, such as income or wealth. In addition, we use heterogeneity analysis to show that the estimated impacts are more pronounced among those with liquidity constraints. These results suggest that naive happiness and life satisfaction equations can overemphasize the importance of income for well-being.