The ranking is traditionally headed by the countries of northern Europe: Finland, Denmark, Norway, Iceland, and the Netherlands.
Each country's happiness score was computed based on multiple variables, including per capita gross domestic product, social support, life expectancy and freedom from corruption. The US ranked 19th after dropping one spot from a year ago.
Pakistan is among the top 20 gainers on the World Happiness index this year, ranked at 67th place, a jump of eight spots from last year's ranking at 75. "It's the way life is lived in those countries".
When compared to last year's report, Malta remains in 22nd in place, and is ranked as the 12th happiest country in the European Union.
Can a country's happiness be measured?
The recently released 7 World Happiness Report revealed that Singapore was the second happiest Asian nation. "But the response of New Zealand's people to the attacks does". "The compulsive pursuit of substance abuse and addictive behaviors is causing severe unhappiness".
Fellow Malaysians, we're super curious to hear what you make of these findings! Who made it to the top three then? Bangladesh is ranked 125.
Japan sank to 58th place, just one notch above Honduras - a Central American country battered by gang violence and poverty.
"It's true that previous year all Finns were happier than rest of the countries' residents, but their immigrants were also happiest immigrants in the world", John Helliwell, co-editor of the report and a professor of economics at the University of British Columbia, told CNN.
The report warned that world happiness has declined in recent years, as negative feelings rise, "comprising worry, sadness and anger, especially marked in Asia and Africa, and more recently elsewhere".
Overall, happiness in the United States actually decreased almost a half-rung over the last decade.
This year's report also broadly considers some of the major forces that influence happiness by changing the ways in which communities and their members interact with each other.