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 …

. Using a GARCH model, we find that Australia experienced more volatility than many commodity exporting poor countries between …