[jltsiren]

The "happiness" in the World Happiness Report is an imperfect translation for a Bhutanese concept. Most discussions about it go astray when people assume that the report is supposed to measure the translated concept.

Roughly speaking, GDP is often used to measure the performance of the economy and as an imperfect proxy for the wellbeing of the people. Bhutan developed the "Gross National Happiness" index and convinced the UN that it should also measure something similar. The Human Development Index already measured the objective aspects of wellbeing, and the World Happiness Report ended up measuring the subjective aspects.

In other words, happiness in this context is not supposed to be about how people feel but about if life is good in general. And you are supposed to compare it to HDI and GDP per capita to see if a country is perfoming better or worse than it's expected to.