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α: calibrated so average coauthorship-adjusted count equals average raw count
This study examines the causal effect of positive income shocks on friendships in Vietnam. We measure income shock by respondents’ lottery prizes, controlling for spending on the lottery. We find a positive effect from lottery winnings on the number of friends. People tend to increase the number of their non-colleague and long-term friends, rather than the number of friends among colleagues or new friends. The elasticity of the number of friends with respect to lottery winnings is estimated at 0.05%. Our estimate implies that the income shock needed to purchase one additional friend is nearly 5,000 USD.