The survey follows another earlier this month that said the tiny South Pacific Ocean archipelago of Vanuatu was the happiest country on Earth.
The latest study, published by a University of Leicester academic who produced a World Map of Happiness, showed seven of the top 10 happiest countries were Western democracies, with the Bahamas, Bhutan and Brunei being the exceptions.
The United States ranks 23rd, Germany comes in at number 35, and Britain ranks 41st.
"When people are asked if they are happy with their lives, people in countries with good health care, a higher GDP (gross domestic product) per capita, and access to education were much more likely to report being happy," said Adrian White, the social psychologist who carried out the study.
"The frustrations of modern life, and the anxieties of the age, seem to be much less significant compared to the health, financial and educational needs in other parts of the world."
Mr White's analysis was based on the findings of more than 100 different studies questioning 80,000 people around the world.
The study published earlier this month by the British think-tank New Economics Foundation, ranked certain members of the Group of Eight (G8) industrialised countries much lower than the latest survey.
The United States, for example, ranked 150th, Germany 81st and Britain 108th.
The top 10 were:
1. Denmark
2. Switzerland
3. Austria
4. Iceland
5. Bahamas
6. Finland
7. Sweden
8. Bhutan
9. Brunei
10. Canada
Selected others included:
15. Netherlands
17. Malaysia
19. Norway
22. UAE
23. United States
26. Australia
31. Saudi Arabia
38. Kuwait
45. Qatar
46. Spain
62. France
63. Hong Kong
64. Indonesia
76. Thailand
78. Philippines
82. China
90. Japan
109. South Africa
125. India
166. Pakistan
167. Russia