Nº 152 (December, 2013). Pablo Gluzmann.

The “unhappy growth paradox” found by Deaton (2008) and Lora and Chaparro (2008) on the Gallup World Poll (GWP) 2006 is inconsistent with the literature in terms of the impact of income on wellbeing in the short term. This paper incorporates alternatively inequality indicators and the change in subjective well-being in the cross-country analysis. The first exercise shows that inequality cannot explain the paradox. The second exercise shows that the results in the GWP 2006 return to be consistent with the literature in the short term when the correct specification of the relationship is set.

JEL Code: I31, O49, O57