The World Happiness Report, published by the University of Columbia's Earth Institute, indicates the happiest countries "tend to be high-income countries that also have a high degree of social equality, trust, and quality of governance".
It gives the UAE a satisfaction rating of 91 per cent.
The report says the four happiest countries are Denmark, Norway, Finland and the Netherlands.
The four least happy are poor countries in sub-Saharan Africa, with Togo ranked last of the 156 nations surveyed.
Steve Hamilton-Clark, chief executive of the market researcher TNS MENA, said the UAE's performance put it on par with the 'gold standard' Scandinavian countries.
"The UAE's 91 per cent satisfaction rating also exceeds the 'All Europe Index' at 75 per cent, as well as those of other leading European nations such as Germany at 88 per cent, Belgium and Britain both scoring 87 per cent, France at 76 per cent, Spain at 73 per cent and Italy at 64 per cent," Mr Hamilton-Clark said.
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said: "This achievement could have not been made without the loyalty, dedication and teamwork spirit shown by the people of the UAE and without excellent cooperation and coordination across the federal and local governments.
"The development plans we approved, the initiatives we launched and the policies and laws we enforced have all but one goal – to bring happiness to the citizens, their families and their children.
"What we have achieved so far is just an initial milestone that will be followed by harder work and more accomplishments so we can become the world's best."
The Emirates Competitiveness Council is working with the Earth Institute to investigate how to further improve the quality of life of Emiratis and expatriates, and achieve a top 10 ranking.
The next edition of the report will be issued in September.