Hoyt Bleakley (University of Michigan) "Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth"

Event
Thursday, November 13, 2014 - 3:40 pm to 5:00 pm
Event Type: 

Location:  368A Heady Hall

Description:  Hoyt Bleakley (University of Michigan)

"Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth"

Abstract: The state of Georgia allocated most of its land through lotteries, providing unusual opportunities to assess the long-term impact of large shocks to wealth, as winning was uncorrelated with individual characteristics and participation was nearly universal among the eligible population of adult white male Georgians. We use one of these episodes to examine the idea that the lower tail of the wealth distribution reflects in part a wealth-based poverty trap because of limited access to capital. Using wealth measured in the 1850 Census manuscripts, we follow up on a sample of men eligible to win in the 1832 Cherokee Land Lottery. We assess the impact of lottery winning on the distribution of wealth 18 years after the fact. Winners are on average richer (by an amount close to the median of 1850 wealth), but mainly due to a (net) shifting of mass from the middle to the upper tail of the wealth distribution. The lower tail is largely unaffected. This is inconsistent with the prediction of an asset-based poverty trap, but is consistent with heterogeneity in characteristics associated with what wealth would have been absent treatment.

Contact Person:  Peter F Orazem

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