In 1970, there were only two state lotteries in the United States. These lotteries sold $100 million in tickets dur- ing the year. By 1996, 36 states participated in lotteries, and consumers purchased more than $34 billion of lot- tery tickets. The first prize in these lotteries sometimes reaches astronomical amounts. Consider, for example, the $314.9 mil lion jackpot in the Powerball Lottery held on December 25, 2002, in 23 states, the District of Columbia, and the U.S. Virgin Islands. The demand for a chance at this fortune was so intense that long lines formed at many of the stores and shops that sold tickets. Pennsylvania lottery officials estimated that 600 tickets were being sold p er second on Christmas Eve, despite the 1 in 120 million odds of winning the jackpot. Thousands of players have become “instant million- aires” (although the payout is often stretched over a 20- or 30-year period). The Massachusetts official who hands out the initial checks to the winners reports that most new millionaires claim that the money will not change their lives. The neoclassical model of labor-leisure choice, however, predicts otherwise. Winning the lottery is a perfect example of an unexpected and often sub- stantial increase in nonlabor income. As long as leisure is a normal good, we would predict that lottery winners would reduce their hours of work, and perhaps even withdraw entirely from the labor market.