It also considers the factors like economic strength (measured in GDP per capita), social support, life expectancy, freedom of choice, generosity and perceived corruption.
Bangladesh was ranked 110th (same rank last year), Sri Lanka at 120 (117 last year) and Bhutan was ranked 97th (84th last year).
With an average rank of 7.537, the happiest country in the world is Norway, according to the poll. Study co-author Jeffrey Sachs of Columbia University told the Associated Press the recent political turmoil may have been a factor: "We're becoming more and more mean spirited.
In fact, among the wealthier countries the differences in happiness levels had a lot to do with "differences in mental health, physical health and personal relationships: the biggest single source of misery is mental illness", the report said.
The United States ranks 14th in the latest version of the World Happiness Report, which was released on Monday. How Norway has climbed to the top (toppling Denmark, a three-time topper) despite the fall in oil prices and depressing Nordic weather, offer some insight into how the index works and its emphases.
But according to the new report, happiness in America has fallen over the years.
Though African countries dominated the list of unhappiest countries, researcher explained that Africans demonstrate "ingenuity that makes life bearable even under less than ideal circumstances".
South Sudan, Liberia, Guinea, Togo, Rwanda, Tanzania, Burundi and the Central African Republic were at the bottom.
The report also points out that happiness is falling in the USA, primarily due to social causes rather than economic.
Malaysians are a happy lot among Asians, going by the World Happiness Report 2017, which claims to be a landmark survey on the state of global happiness. China, the world's most populous country, is at 79th while India, the second most populous country, is at 122nd place. It is the fifth report to come out since 2012. "Happiness is increasingly considered the proper measure of social progress and the goal of public policy", the report said.
The information thus deduced is used to generate a happiness score from 1 to 10.