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Lottery Winners, Professional Athletes and Bankruptcy

Lottery Winners, Professional Athletes and Bankruptcy. Does having more money mean that you are happier? Does having more money mean that you are less likely to become ‘broke’?. Adaption Level Theory. Harry Helson (1947)

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Lottery Winners, Professional Athletes and Bankruptcy

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  1. Lottery Winners, Professional Athletes and Bankruptcy Does having more money mean that you are happier? Does having more money mean that you are less likely to become ‘broke’?

  2. Adaption Level Theory • Harry Helson (1947) • Adaptation-Level Phenomenon: Adaptation-Level Phenomenon is the tendency people have to quickly adapt to a new situation, until that situation becomes the norm. Once the new situation is normal, another new experience is needed -- it constantly raises the level for what is new or exciting as each new thing becomes the norm. • For instance, you may live on a small amount of money, say, $1,000 per month. You may think "if I had more money I would always be able to pay all my bills and still buy other things." Then you get a big raise and you start making $3,000 per month. At first this would be a very exciting new experience. After a while, however, when all the new income has been allotted to pay some bill, you might again start to think, "if I had more money.... " You had a new situation, you adapted to it, and it became your normal.

  3. J PersSoc Psychol. 1978 Aug;36(8):917-27. • Lottery winners and accident victims: is happiness relative? • Brickman P, Coates D, Janoff-Bulman R • Abstract • Adaptation level theory suggests that both contrast and habituation will operate to prevent the winning of a fortune from elevating happiness as much as might be expected. Contrast with the peak experience of winning should lessen the impact of ordinary pleasures, while habituation should eventually reduce the value of new pleasures made possible by winning. Study 1 compared a sample of 22 major lottery winners with 22 controls and also with a group of 29 paralyzed accident victims who had been interviewed previously. As predicted, lottery winners were not happier than controls and took significantly less pleasure from a series of mundane events. Study 2 indicated that these effects were not due to preexisting differences between people who buy or do not buy lottery tickets or between interviews that made or did not make the lottery salient. Paraplegics also demonstrated a contrast effect, not by enhancing minor pleasures but by idealizing their past, which did not help their present happiness. • What is this article saying?

  4. But this study is from 1978 (not that long ago ;)But does this hold true for current day society?

  5. More Current Study BMJ. 2005 December 24; 331(7531): 1489–1490. Happiness, Get happy—it's good for you Tony Delamothe • http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1322236/ • How does this relate to the Adaptation Level Theory?

  6. Article on Lottery Winners • Read the article you were given. • What is the significance? • Let’s look for common reasons why people who won the lottery were likely to become bankrupt.

  7. Now Let’s Look at Professional Athletes • Documentary: • ESPN 30 for 30 Documentary - ‘BROKE’ • Primary Evidence – Interviews with Professional Athletes who became ‘BROKE’ after making an enormous amount of money • Answer the questions on your sheet while you watch.

  8. What about the Majority of the Canadian Population?How do they handle their money?

  9. What the Lesson? • “You can lead a horse to water, but you can’t make him drink” • “Give a man a fish; you have fed him for today.  Teach a man to fish; and you have fed him for a lifetime” • It is important to teach young people financial literacy so that they have the skills they need to plan for their future and have a foundation for a stable life.

  10. Financial Literacy – In Class Activity Your in class budget activity: • Fill in the blank budget provided with what you ‘think’ the costs are. • You have $50, 000 to work with (after taxes) – for yourself • We will go through the budget together • This is meant to give you an introduction into financial and money literacy in our society

  11. Financial Literacy - Summative • You will fill in the same budget, except this time you will have only $22, 000 (after taxes) – less than half of your first budget • You will have to budget for a family that is in a similar situation as this: • http://www.youtube.com/watch?v=gfRoY3pIGa0 • http://www.youtube.com/watch?v=u0yTVclbOQw&list=PL872849DD077FDF99&index=5 • Single parent, 2 children aged 9 and 10 • Unemployed parents with 4 young children • Works at a grocery store – 13 years • Hard to get social assistance • Children are hungry with no resources • No benefits or full time rate • Living on unemployment • Depression – anxiety - saddness • Stigma – “what’s wrong with you?”

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