Happiness and the Human Development Index: Australia is Not a Paradox

9 Pages Posted: 21 Jun 2006

See all articles by Andrew Leigh

Andrew Leigh

Australian House of Representatives Parliament House; Centre for Applied Macroeconomic Analysis, ANU; IZA

Justin Wolfers

University of Michigan at Ann Arbor - Department of Economics; University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; The University of Sydney - Discipline of Economics; Brookings Institution - Economic Studies Program; Peter G. Peterson Institute for International Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Kiel Institute for the World Economy

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Abstract

In 'Happiness and the Human Development Index: The Paradox of Australia', Blanchflower and Oswald (2005) observe an apparent puzzle: they claim that Australia ranks highly in the Human Development Index (HDI), but relatively poorly in happiness. However, when we compare their happiness data with the HDI, Australia appears happier, not sadder, than its HDI score would predict. This conclusion also holds when we turn to a larger cross-national dataset than the one used by Blanchflower and Oswald, when we analyse life satisfaction in place of happiness, and when we measure development using Gross Domestic Product per capita in place of the HDI. Indeed, in the World Values Survey, only one other country (Iceland) has a significantly higher level of both life satisfaction and happiness than Australia. Our findings accord with numerous cross-national surveys conducted since the 1940s, which have consistently found that Australians report high levels of well-being.

Suggested Citation

Leigh, Andrew and Wolfers, Justin, Happiness and the Human Development Index: Australia is Not a Paradox. Australian Economic Review, Vol. 39, No. 2, pp. 176-184, June 2006, Available at SSRN: https://ssrn.com/abstract=909826 or http://dx.doi.org/10.1111/j.1467-8462.2006.00408.x

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