5 Reasons You're Lucky You Didn't Have Winning Powerball Numbers
By SUSANNA KIM (@skimm)
Nov. 29, 2012
First, you are not alone. If you bought a ticket, you are one of the millions of losers in the country. In fact, leading up to the drawing on Wednesday night, lottery officials said they were selling 131,000 tickets a minute.
If you didn't buy into the frenzy of "lotto fever" because you forgot to buy a ticket or practiced self-control, you may be feeling pretty good when comparing yourself to co-workers who threw away $20 on losing tickets. The odds of winning the jackpot were more than one in 175.2 million anyway.
Media stories are quick to mention the tremendous tragedies that previous lottery winners have faced, with some observers calling winners "cursed." Jack Whitaker, winner of a $315-million Powerball jackpot in 2002, said he wished he never won after his teenage granddaughter became addicted to drugs and then was found dead in 2007 of what authorities ruled as an overdose. His daughter died in 2009 in another apparent overdose.
"Since I won the lottery, I think there is no control for greed," he told ABC News' "20/20". "I think if you have something, there's always someone else that wants it. I wish I'd torn that ticket up."
If you are still feeling regret for not waking up this morning to billions of dollars through no merit of your own, here are five other reasons why it may be good you didn't win the lottery:
| Lotto Winners May Be More Likely to File for Bankruptcy |
The late hip-hop artist Notorious B.I.G. said it best with his rap single, "Mo Money Mo Problems."
A group of economists conducted research about whether that was true. Scott Hankins of the University of Kentucky, Mark Hoekstra of the University of Pittsburgh and Paige Marta Skiba of Vanderbilt University studied people who won more than $600 from the Florida Lottery between 1993 and 2002.
Their paper, "The Ticket to Easy Street? The Financial Consequences of Winning the Lottery," was published in October 2009.
Although they found recipients of $50,000 to $150,000 were 50 percent less likely to file for bankruptcy in the two years after winning relative to small winners, "they are equally more likely to file three to five years afterward."
Just because you win money does not mean you will be able to manage or hang on to it for very long.
"Bankruptcy records indicate that even though the median winner of a large cash prize could have paid off all of his unsecured debt or increased equity in new or existing assets, he chose not to do either," the researchers found.
Some people choose to maintain their normal lives even after hitting the jackpot.
Bruce Sacerdote, economics professor at Dartmouth College, studied the effects of lottery winnings from Massachusetts winners in the 1980s. He found that several years after winning big prizes, about 40 percent of winners were still working for various reasons.
For each $100,000 won per year, people reduced labor market earnings by $11,000 and people saved about 16 percent of their gross winnings, on average.
| Winning the Jackpot Won't Make You Happier ... |
Money and happiness is a favorite topic for researchers, and the rare phenomenon of an unexpected cash windfall is just as enticing. Sacerdote noted that happiness from a jackpot is likely a temporary high.
"You see a modest bump in happiness and people get used to whatever their income is," Sacerdote said. "My suspicion, which is based on more general data on income and happiness, is you might not see a permanent bump."
Another group of economists from University of California, Santa Barbara, University of Amsterdam and Tilburg University in the Netherlands studied winners of the Nationale Postcode Loterij (PCL), the second largest national lottery in the Netherlands.
They found that winning the PCL, which amounts to about 8 months of income for an average household, "has no detectable effects on a household's reported happiness," as described in their paper, "The Own and Social Effects of an Unexpected Income Shock: Evidence from the Dutch Postcode Lottery."
The authors noted happiness is linked to long-term personal income rather than short-term fluctuations and that may be because "long-term income differences are more likely to be seen as 'earned' and thus legitimate."
In the Journal of Health Economics, authors Jonathan Gardner and Andrew J. Oswald studied a group of British people who received between £1000 and £200,000, or about $1,600 to $320,760 with current exchange rates. In the year a prize is won, they found that "mental stress goes up, while in subsequent years lottery winners show less stress than non-winners." Of course, the absence of mental stress and happiness are not the same thing, they noted in the paper, "Money and Mental Wellbeing: A Longitudinal Study of Medium-Sized Lottery Wins."
| You Might Be Better Off Winning a Smaller Prize Anyway |
In the "Money and Mental Wellbeing" study, the authors honed down on medium-sized lottery winners. They analyzed 137 British winners of between £1,000 and approximately £120,000 in 1998 pounds sterling, about $1,600 to $192,456 with current exchange rates. The winners were compared to people who did not win and others with smaller prizes. They found "the medium-size winners go on to have significantly better psychological health."
But, the authors cautioned, the sample size was "fairly small, so it is sensible to be cautious in interpretation."
| Keeping Up With the Joneses: You're Not Perpetuating a Rat-Race in Your Neighborhood |
In the study of Dutch lottery winners, the researchers found that a winner's neighbors' consumption patterns changed. In particular, the study noted statistically significant increases on car consumption and exterior home renovations, "both of which are likely to be easily, and repeatedly, visible to a household's neighbors."
People who did not participate in the lottery but lived within a winner's postal code were more likely to acquire a new car in the six months after the lottery win than non-participants living in neighborhoods without a winner. The same was true for major exterior home renovations in six months after the lottery.
| You May Be Bringing Everyone Else's Hopes Down |
Knowing a lottery winner may encourage some people to get into the habit of purchasing tickets. It could also turn off others who think the chances of two people in the same community winning a ticket may be slim.
"For most people, purchasing a ticket and fantasizing about what life will be like once you've won is the most pleasant part of the lottery experience," said Scott Bea, a clinical psychologist with the Cleveland Clinic in Ohio, previously told ABC News. "You could probably flush the same amount of money down the toilet and get much the same result -- but then you wouldn't have the dream."
The Dutch study found that people who did not participate in the lottery but are surrounded by households who won the lottery six months ago are less likely to play than nonparticipants who are not surrounded by winners.
The study added that although lottery winnings do not make households happier, they don't make neighboring households less happy.
©2012 ABC News – Good Morning America
5 Reasons You're Lucky You Didn't Have Winning Lottery Numbers - ABC News
