Money

Winning the lottery doesn't make you happier, say researchers who studied 3,000 winners

917692562
Vladimir Vladimirov | Getty Images

A French man recently won his second one-million-euro jackpot in less than two years, and he has no plans to stop trying his luck, the BBC reports. The unnamed gambler won his first million euros in November 2016 and played the lottery every week after that until he won again.

He may be gaining more than just money, but less than he expects. A new study finds that those who win big cash prizes not only benefit from their new wealth, they also feel a boost in their life satisfaction that lasts for at least 10 years. They do not, however, feel happier.

While observing the effect of wealth on a people's psychological well-being, researchers found that, when people won at least $100,000 in the lottery, their happiness and mental health wasn't significantly changed, but their overall satisfaction with life was positively affected for a decade or more.

The study, led by researchers out the Stockholm School of Economics, Stockholm University and New York University, was circulated by the National Bureau of Economic Research as a working paper on Monday. "Large-prize winners experience sustained increases in overall life satisfaction that persist for over a decade and show no evidence of dissipating with time," the researchers conclude.

As lead researcher Robert Ostling explains to MarketWatch, "life satisfaction" refers to how people feel about the quality of their lives overall, whereas "happiness" measures respondents' day-to-day feelings. "Our results suggest it is more difficult to affect happiness than life satisfaction," Ostling adds.

Researchers studied 3,362 winners of lotteries from five to 22 years before whose gains totaled $277 million. They measured happiness, mental health, satisfaction with their personal finance and overall life satisfaction through several questionnaires, which posed questions such as, "'All things considered, how happy would you say you are?"and "Taking all things together in your life, how satisfied would you say that you are with your life these days?"

They hypothesized that lottery money would make the large prize winners happier and improve their mental health, but that was not the case. Winners do, however, "appear to enjoy sustained improvement in economic conditions that are robustly detectable for well over a decade after the windfall," the authors note. The long-term impact, they add, is one of the most substantial findings in the paper.

Winners, they found, also tended to invest a portion of their wealth in financial assets and spread out their spending evenly, which runs counter to the stereotype of lottery winners blowing through their cash.

"Our results suggest it is more difficult to affect happiness than life satisfaction." -Robert Ostling, lead researcher

The study mainly looked at the effect of receiving lottery prizes in lump sums as opposed to monthly installments, researchers warn. They also suggest that future researchers look at the short-term effects of winning the lottery, including the effects of receiving so much money at once.

While this study proves there can be a lasting psychological benefit to accepting a lump sum payment, in terms of life satisfaction if not happiness, many planners say that's not a risk worth taking. "If you get a huge lump sum, it's easier to make a mistake, whereas if you choose the annuity, then at least if you mess up and blow the first year's worth, you have another chance," says certified financial planner at Betterment Nick Holeman, and billionaire investor Mark Cuban agrees.

Still, CNBC's "Mad Money" host Jim Cramer would tell you that getting the cash upfront is the way to go. "Take the money all at once," Carmer says. "Don't let them string it out like that. You want the time value of all that cash working for you. That's vital."

Here's what you should doif you find yourself winning the lottery anytime soon.

Like this story? Like CNBC Make It on Facebook!

Don't miss: