January 7, 2021 | Eul Basa

Lottery Psychology: Would Winning Millions Really Make You Happy?


It's a prospect that seems too good to be true: pick the correct series of random numbers, and you too could join the ranks of the super rich. Rage-quit your job; buy a yacht; travel around the world. The lottery seems to promise endless possibilities for the lucky few who hit it big. But would winning actually make you happy? Or is there more to lottery psychology than meets the eye?

We’ve all heard anecdotal tales of lottery winners who blew it all in a few years, driving themselves and their families to despair. Ill-equipped for their sudden wealth, they squander their windfall on tigers and Lamborghinis, get suckered by venal family members, or just plain crack under the pressure. 

But are these just urban legends? What really happens to lottery winners? As they see it, have their lives really changed for the better? Or do they end up wishing they’d never won at all?

Some new psychological studies provide intriguing answers to these questions.

Fitting the stereotype

Firstly, the riches-to-rags lotto winner is not entirely mythical. Quite a few people really have gone mad after hitting the jackpot, landing themselves right back in the poorhouse. 

Michael Caroll won more than USD $12 million in a UK lottery. Caroll was an ex-convict who promptly began using his fortune to gamble, do drugs, and engage thousands of prostitutes. He lost his family and his winnings, and was back on welfare 8 years after collecting his pay-out. 

In 1998, William Post III won about $16 million in the Pennsylvania state lotto. His own brother tried to kill him as a result, while other members of his family bilked him for fruitless investments. He died penniless. 

Post wasn’t the only winner subjected to violence by someone he trusted. Florida’s Abraham Shakespeare won more than $30 million in 2006. In 2006, he was found dead, buried beneath a concrete slab. His killer was a woman who had befriended him and defrauded him of almost $2 million. 

Billie Bob Harrell Jr. of Texas won $30 million in 1997. He showered family and friends with gifts, buying multiple homes for his various relatives, giving generously to his church, and bailing out members of the congregation when they found themselves in financial hardship. Tragically, he took his own life less than two years after winning the lottery. His marriage was on the rocks, and his spending had spiralled out of control.

There are dozens of similar cautionary tales. Anecdotal evidence is one thing; but when there are so many anecdotes, it becomes clear that a certain percentage of lottery winners derive nothing but woe from their winnings. 

However, that’s not the whole story. Not every lottery winner ends up on the skids.

Lottery psychology: happiness vs. satisfaction

Research suggests a sudden infusion of wealth actually won’t make you happier. But it will make you more satisfied. What does that mean? 

The researchers define ‘happiness’ as your day-to-day emotional experience. ‘Satisfaction,’ on the other hand, refers to overall feelings about the quality of your life. 

According to one study’s abstract: “Large-prize winners experience sustained increases in overall life satisfaction that persist for over a decade and show no evidence of dissipating with time.”

In other words, winning millions won’t make you feel better about the daily problems you face, but you will have a better overall feeling about the nature of your existence -- at least for 10 years or so. 

This makes sense; arguably the most valuable thing we gain from wealth is a sense of security. If you’re a multi-millionaire, you don’t have to worry about food, clothes, housing, putting your kids through college. But that doesn’t mean you won’t stub your toe, have to go to the dentist, get in a fight with your spouse, or just plain feel down in the dumps. 

The ‘myth’ of the spendthrift lotto winner

Again, as we’ve seen, there have been plenty of big time winners who blew through their entire fortunes with absurd ease. But studies suggest that’s atypical.

Contrary to stereotypes, most lottery winners are careful with their wealth. They tend to invest and spend carefully; the majority are still very rich after 10 years. In general, winners are more responsible than we might suppose.

Interestingly, however, this depends on how the pay-out is granted. Winners who receive a lump-sum payment are far more likely to save and invest their money. On the other hand, winners who receive their jackpots in instalments (i.e. $1,000 a week for life) are more likely to spend all their winnings. 

So the old adage “mo’ money mo’ problems” doesn’t seem to hold water in the case of lottery winners. 

But does winning change people’s lives and attitudes in more fundamental ways?

Lottery psychology and identity

As we alluded to, one of the biggest appeals of winning the lottery is that it would allow us to quit our jobs. Surely, that’s the first thing most winners do, right?

Apparently not. One 2009 study found that only 12% of lottery winners straight-up quit their jobs. About 24% took unpaid leave and 16% cut back on their hours, but a surprising 62% made no changes to their work lives at all. 

Kind of mind-boggling, isn’t it?

But it seems to be part of a larger story. As we said in the intro, most people imagine their lives would be completely transformed if they won the lottery. It’s easy to picture yourself moving to the south of France, buying a mega-yacht, and spending the rest of your days on permanent vacation.

In fact, this is unlikely. Most lotto winners don’t change the fundamental details of their lives. They continue living as they did before, only with added financial security and increased consumption. It seems to be important to most winners to retain their sense of identity and purpose. When we consider some of the disastrous alternatives, that’s not necessarily a bad thing.

Conclusions

So would winning the lottery leave you as a miserable burn-out in five years time? Not unless you were extremely foolish. But it wouldn’t make you a happy and complete person, either. 

In fact, all these studies suggest winning the lottery probably wouldn’t change you that much at all. Most winners still want some sense of purpose and accomplishment in their lives, most don’t completely reinvent themselves, and most don’t completely implode. They just keep swimming -- albeit with a lot more air in the tank than the rest of us!

 


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