Please use this identifier to cite or link to this item: http://hdl.handle.net/2440/116275
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Type: Journal article
Title: Do you have to win it to fix it? A longitudinal study of lottery winners and their health-care demand
Author: Cheng, T.
Costa-Font, J.
Powdthavee, N.
Citation: American Journal of Health Economics, 2018; 4(1):26-50
Publisher: Massachusetts Institute of Technology Press (MIT Press)
Issue Date: 2018
ISSN: 2332-3493
2332-3507
Statement of
Responsibility: 
Terence C. Cheng, Joan Costa-Font, Nattavudh Powdthavee
Abstract: We exploit lottery wins to investigate the effects of exogenous changes to individuals' income on the utilization of health-care services, and the choice between private and public health care in the United Kingdom. Our empirical strategy focuses on lottery winners in an individual fixed-effects framework and hence the variation of winnings arises from within-individual differences in small versus large winnings. The results indicate that lottery winners with larger wins are more likely to choose private health services than public health services from the National Health Service. The positive effect of wins on the choice of private care is driven largely by winners with medium to large winnings (win category > £500 [or US$750]; mean = £1,922.5 [US$2,893.5], median = £1058.2 [US$1,592.7]). There is some evidence that the effect of winnings vary by whether individuals have private health insurance. We also find weak evidence that large winners are more likely to take up private medical insurance. Large winners are also more likely to drop private insurance coverage between approximately 9 and 10 months earlier than smaller winners, possibly after their winnings have been exhausted. Our estimates for the lottery income elasticities for public health care (relative to no care) are very small and are not statistically distinguishable from zero; those of private health care range from 0 to 0.26 for most of the health services considered, and 0.82 for cervical smear.
Keywords: Lottery wins; health care; income elasticity; public-private
Rights: © 2017 American Society of Health Economists and Massachusetts Institute of Technology
RMID: 0030076613
DOI: 10.1162/ajhe_a_00092
Appears in Collections:Economics publications

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