[devonkim]

The psychology of a large one time payment versus a passive, smaller one is absolutely immense and should not be equated. Native tribes have oftentimes given their youth large payments that get spent on expensive consumer goods that wind up back in pawn shops, but UBI experiments in Kenya and in low income areas around the world have shown dramatically different results with the hallmarks of upward mobility presenting (risk taking, lower stress, future orientation, etc.). Lottery wins are nothing like a permanent trust fund that pays out if you stay out of jail like in Yang’s UBI.

[izzydata]

There must be some data on lottery winners taking one lump sum and small payouts over time.

[devonkim]

I read somewhere around 80%+ take the lump sum about 12 years ago. Given the risks of inflation over 25+ years it isn’t a bad idea. Most lottery winners get accosted by family members or spend like crazy with their money and wind up broke in the end. However, a great deal of them do at least take care of their health at least (getting teeth fixed was common). A mental trap of scarcity makes it difficult for the perpetually poor to think of money as nothing more than something to be spent rather than invested, but even here the HGTV dream home winner around 2007 sold the house to create... a construction company, which went bankrupt quickly.

Financial literacy can be taught over time though similar to helping people diet and control portions.