The economics of happiness, which is the subject of this final paper, is a scientific branch of economy that deals with the theoretical and quantitative study of happiness, well-being of citizens, life satisfaction and other concepts related to the happiness of the individual. The modern concept and goals of the economy of happiness are opposed to the goals of the traditional economy, which are most often represented by monetary indicators such as GDP, unemployment rate, inflation rate and balance of payments. Due to their limitations, these monetary indicators are increasingly criticized and it is therefore necessary to develop measures that will complete the picture of the welfare of a country. Namely, well-being consists of two dimensions - subjective and objective well-being. The aim of this paper is to explain the ideas of modern economy - the economics of happiness and traditional economy, as well as to analyze the development of happiness and satisfaction with the quality of life in the Republic of Croatia. The theoretical part of the paper explains the starting points and indicators of the success of traditional measures, as well as the starting determinations and measurement of the happiness of modern approaches to the economy. After the theoretical part, the national research on happiness and quality of life in the Republic of Croatia is presented, which was then shown on the scale of happiness in relation to other members of the European Union. Furthermore, the results of selected research on happiness at the level of Europe and the European Union are researched and presented. Based on the research results, the member states that bear the title of the happiest countries are presented and the factors that positively affect the happiness of the inhabitants of these countries are listed and explained, which ultimately bring them to the top ten on the happiness scale. At the end of the paper and based on the collected data, certain conclusions were made about the advantages of the economics of happiness over the traditional economy.