We exploit lottery wins to investigate the effects of exogenous changes to individuals'udincome on the utilization of health care services, and the choice between private and publicudhealth care in the United Kingdom. Our empirical strategy focuses on lottery winnersudin an individual fixed effects framework and hence the variation of winnings arises fromudwithin-individual differences in small versus large winnings. The results indicate that lotteryudwinners with larger wins are more likely to choose private health services than publicudhealth services from the National Health Service. The positive effect of wins on the choiceudof private care is driven largely by winners with medium to large winnings (win categoryud> $500 (or US$750); mean = $1922:5 (US$2,893.5), median = $1058:2 (US$1592.7)).udThere is some evidence that the effect of winnings vary by whether individuals have privateudhealth insurance. We also find weak evidence that large winners are more likely to take upudprivate medical insurance. Large winners are also more likely to drop private insurance coverageudbetween approximately 9 and 10 months earlier than smaller winners, possibly afterudtheir winnings have been exhausted. Our estimates for the lottery income elasticities forudpublic health care (relative to no care) are very small and are not statistically distinguishableudfrom zero; those of private health care range from 0 { 0.26 for most of the health servicesudconsidered, and 0.82 for cervical smear.
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