While household income has often been the key measure in defining well-being, the OECD's Better Life Index has sought to widen the criteria on what the good life means.
The Organization for Economic Cooperation and Development (OECD) found using 11 factors that Australia was the world's most prosperous and happy country.
The Paris-based organization compared gross domestic product, along with measures such as civic engagement, health, life satisfaction, safety and work-life balance of 36 countries.
The US ranked on top in terms of wealth and household income but ranked only sixth overall.
Australia, Sweden, Canada, Norway and Switzerland took the top five spots.
At the bottom of the list Turkey, Mexico, Russia, Brazil and Chile.
In terms of work-life balance, the northern European countries dominate (though Spain ranks high), while North America falls far behind.
Life satisfaction, though a subjective measure, ranks highest in Scandinavia but Switzerland comes out on top.
The US ranks 15th in this measure.
Oddly, Australians, who rank at the top of the index, were not particularly satisfied with their lives, according to the survey.
OECD head of monitoring well-being and progress, Romina Boarini, said that income inequality is one major factor affecting a country's ranking.
“We actually see that the lower the social gaps are, the higher the average well-being outcomes,” Boarini said, according to NBC.
She also noted that a high income didn't necessarily bring happiness and life satisfaction.
"Perhaps it’s better to sacrifice a little bit of income to have a little bit more [in terms of] friends and community.”