Measuring social interactions: results from the Dutch Post Code Lottery

In the Dutch Post Code Lottery a postal code (19 households on average) is randomly selected
weekly, and sizeable prizes (€12,500 per lottery ticket) are awarded to lottery participants living in that postal code. In addition to the monetary prizes, one of the winners wins a BMW. We analyze data on consumption, and reported happiness of winners and of nonwinners in winning and (adjacent) nonwinning postal codes from our survey of over 2000 households. Respondents provided information on both current behavior (six months after the prize) and, retrospectively, behavior a year earlier (six months before the prize). This unique data set allows us to make the key comparisons required to identify social interaction effects.