Alejandro Martinez Marquina (Stanford University)

Estimating the Causal Impact of Private Wealth on Local Outcomes (joint with C Kent)

For any information please contact N. Iriberri

How does a large, unconditional wealth shock to a town impact local development?
We analyze a natural experiment in Spain to answer this question. Every year since
1812, Spain has conducted a national lottery, which often results in the random allocation
of up to $800 million in cash to the citizens of one town. This is the only
case in the world where individuals living in the same town all randomly receive pure
wealth shocks of this scale. We examine the effect of these wealth shocks by comparing
winning towns to losing towns that had similar lottery expenditures. Our results show

that large, private wealth shocks lead to a persis


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