The Scandinavian nation, which was ranked fourth in last year's report, jumped to the top this year on the basis of several key calculations, including levels of caring, freedom to make life decisions, generosity, good governance, honesty, health and income.
Other factors by which 155 countries were measured in the annual World Happiness Report are: inequality, life expectancy, GDP per capita, public trust (i.e. a lack of corruption in government and business), and social support.
Denmark, Iceland, Switzerland and and Finland round out the top five, while the Central African Republic came last in the World Happiness Report.
Western Europe and North America dominated the top of table, with the US and Britain at 14th and 19th, respectively, reported BBC.
Countries in sub-Saharan Africa and those hit by conflict have predictably low scores.
Syria placed 152 of 155 countries -- Yemen and South Sudan, which are facing impending famine, came in at 146 and 147.
The World Happiness Report was released to coincide with the United Nations' International Day of Happiness on March 20.
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