Each week, the Dutch Postcode Lottery (PCL) randomly selects a postal code, and distributes cash and a new BMW to lottery participants in that code. We study the effects of these shocks on lottery winners and their neighbors. Consistent with the life-cycle hypothesis, the effects on winners' consumption are largely confined to cars and other durables. Consistent with the theory of in-kind transfers, the vast majority of BMW winners liquidate their BMWs. We do, however, detect substantial social effects of lottery winnings: PCL nonparticipants who live next door to winners have significantly higher levels of car consumption than other nonparticipants. JEL: D14, D91, H23, H27

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SUMMARYWe develop an empirical discrete-choice interaction model with a finite number of agents. We characterize its equilibrium properties-in particular the correspondence between interaction strength, number of agents, and the set of equilibria-and propose to estimate the model by means of simulation methods. In an empirical application, we analyze the individual behavior of high school teenagers in almost 500 school classes from 70 schools. In our baseline model endogenous social interaction effects are strong for behavior closely related to school (truancy), somewhat weaker for behavior partly related to school (smoking, cell phone ownership, and moped ownership) and absent for behavior far away from school (asking parents' permission for purchases). Intra-gender interactions are generally much stronger than cross-gender interactions. In a model with schoolspecific fixed effects social interaction effects are insignificant, with the exception of intra-gender interactions for truancy.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. University of Wisconsin Press andThe Board of Regents of the University of Wisconsin System are collaborating with JSTOR to digitize, preserve and extend access to The Journal of Human Resources. ABSTRACT This paper discusses an investigation of the effects of systematic underreporting of income and of sample selectivity on the estimated levels of two subjective definitions of poverty: the socalled subjective poverty line and the Leyden poverty line. Both turn out to have substantially biasing effects. We present methods to remedy the biases. The resulting adjusted poverty lines prove to be quite accurate. Furthermore, we make suggestions for the design of questionnaires that are used in the surveys on which these poverty definitions are based.Kapteyn is a professor of economics at Tilburg University; Kooreman is a professor of economics at Tilburg as well. Willemse is a researcher for the Federal Reserve Bank of Richmond, Virginia.

This paper discusses, estimates and compares some microeconometric models for simultaneous discrete endogenous variables. The models are based on the assumption that observed endogenous variables represent the outcome of a static discrete game. I discuss models based on non‐cooperative equilibrium concepts (Nash, Stackelberg), as well as models which presume Pareto optimality of observed outcomes. The models are estimated using data on the joint labor force participation decisions of husbands and wives in a sample of Dutch households.