We don't know if money buys happiness — but winning money sure can help.
That's what two European economists found after analyzing hundreds of lottery winners in Germany. The new research, outlined in a chapter in the book The Economics of Happiness, finds that winning the lottery raises people's satisfaction with both their incomes and their lives overall.
This is big news because it contradicts earlier studies that found little evidence of a link between well-being and winning the lottery. In fact, depending which study you cite, you could say winning the lottery has no resulting effect on happiness, diminishes physical health, or that it even worsens mental health for lower-income winners.
You’ve likely seen those negative findings highlighted every time there’s a big Powerball or Mega Millions prize in the news. On the one hand, it makes sense that we'd enjoy reading about unhappy lotto winners. After all, it’s a lot easier to be OK with continually buying a losing lottery ticket if science suggests winning isn’t all it’s cracked up to be.
Yet all those previous studies apparently suffer from the same common problem: small sample sizes. In fact, the pioneering study in this area looked at just 22 lottery winners.
The authors of the new research say they have access to a bigger set of lottery winners than almost any other study on the topic. They started with a set of 617 winners in Germany, and the researchers narrowed it to those who won at least the equivalent of about $2,770 for a total of 342 winners, according to Vox.
The new results are "more in accord with common sense and economic theory" than the previous research, the authors write.
In other words: Duh. Winning the lottery sounds great because it is great.
Snarkiness aside, the relationship between money and happiness actually is complicated. Previous research on money and emotional well-being found that day-to-day happiness levels increase in step with more money, but only until you hit a certain amount—about $75,000 a year. And after people earn $95,000 a year, emotional well-being and life satisfaction actually start to decline, one study found.
Other research suggests that wealthier people aren’t any happier, and that millionaires actually think they need a lot more money to be happier. Just 13% of millionaires in a one study said they were happy with the amount of money they already had.
Of course, it’s possible people experience money differently when it comes from different sources. That is, the amount of money you need to earn annually at work to be happy versus the amount you need to win in the lottery to be happy could be very different.
As Kelsey Piper writes in Vox, there’s a lot more research to do in the area, including testing the effects on lottery winners outside of Germany and tracking people's happiness several years after winning the lottery.
But the takeaway for now? BRB — we're off to play our lucky numbers.