Happiness, seen as a combination of high income and psychological wellbeing, thrives in Sweden while personal wealth swells.

• Swedish children among the happiest
• Why money doesn't motivate most workers

Yes, there’s a link between wealth and happiness, although quantifying happiness isn't an easy task. The five happiest countries in the world -- Denmark, Finland, Norway, Sweden and the Netherlands -- all enjoy high levels of prosperity.

A Gallup report released last month found that countries with high gross domestic products won out for well-being and found an association between life satisfaction and income. Happiness is seen as a combination of high per-capita income and psychological well-being.

"The Scandinavian countries do really well," Jim Harter, a chief scientist at research firm Gallup told Forbes. "One theory why is that they have their basic needs taken care of to a higher degree than other countries. When we look at all the data, those basic needs explain the relationship between income and well-being."

Despite the financial crisis and economic downturn, Swede’s personal wealth has increased to its highest nominal level ever, mainly on the back of a bullish stock market and rising house prices. And at the same time as Swedes generally are getting more rich, the number of dollar millionaires has increased more in Sweden than in most other European and Western countries.

Does that mean that Swedes are more happy today than a year ago? No, not really. The United States may be the richest nation on Earth, but it's not the happiest. There's more to happiness than riches.

There are two major categories of happiness: overall life satisfaction; and more moment-to-moment enjoyment of life. While overall satisfaction of life is strongly tied to income, how much one enjoys life (by measures such as laughing and smiling) depends more on social and psychological needs being met.

Some economists think money increases happiness at the low end of the pay scale as it helps people meet their basic needs, but doesn’t do much once a person is lifted out of poverty. The Gallup study suggests the correlation between money and happiness goes beyond basic needs.

"Money is an object that many or most people desire, and pursue during the majority of their waking hours," researchers wrote in the report. "It would be surprising if success at this pursuit had no influence whatsoever when people were asked to evaluate their lives."

The poll asked respondents to reflect on their overall satisfaction with their lives, and ranked their answers using a "life evaluation" score between 1 and 10.