Since 2013, the United Nations has been celebrating the International Day of Happiness on March 20 as a way to recognise the importance of happiness in the lives of people around the world.
"Countries at the bottom end of the rankings typically have low values of all six of the key variables - income, health, social support, freedom, generosity and absence of corruption".
Countries that achieved positive results have "high levels of mutual trust, shared goal, generosity and good governance", said Helliwell, a professor at the University of British Columbia.
Sachs suggests that in order for America's happiness to be restored, the country must place more focus on improving the social capital, rather than the economy.
Jeffrey Sachs, the director of the U.N.'s Sustainable Development Solutions Network, said the USA had fallen because of inequality and corruption. There are also considerable inequalities in life evaluations in African countries, and this inequality in happiness has increased over the past years.
In order to raise the overall level of happiness among US citizens, the report urges America to rebuild social capital by remedying the five factors through campaign finance reform, reducing financial inequality through new policies, improving race relations and better access to quality education.
The top countries were Western, developed countries - with Australia placing ninth. The Nordic nation rose to the top from fourth place in 2016, and replaces Denmark, which took the top spot a year ago. "Let's hold our leaders to this fact", Sachs said.
The report not just ranks countries in terms of happiness but also attempts to explain why one country is happier than other.More news: Forbes' Billionaires List: Amazon CEO Bezos Is Biggest Gainer, Cracks Top 3
Independent researchers used a combination of empirical data and subjective opinion about incomes, social support, healthy life expectancy, freedom of choice, generosity of governments and individuals, and perception of corruption to determine the ranking of happiness.
A global happiness report has made the Norwegian foreign minister, well, happy.
He said research reveals that happiness differs considerably across employment status, job type, and industry sectors. "Work-life balance, job variety and the level of autonomy are other significant drivers", De Neve said.
Authors said that income differences were more important in accounting for happiness in poorer countries, but that even in those countries mental illness was a major source of misery.
Americans, on the other hand, have been reporting declining happiness over the past decade, according to the report.
Malaysia has been ranked as the fourth happiest country in Asia.