The subject of this final paper is the economics of happiness, a relatively new concept in economics which has been given considerable importance in the last few years. Happiness has primarily been the subject of research in psychology for a long time, but recently the issue of happiness has been more frequently addressed in economics. The economics of happiness is a new economic field that puts in relation the material well-being of the citizens of a country and the subjective experience of one's own life. It is this subjective experience of one's own life that relates to happiness in general, and economists want to show how happiness is in general affected by both subjective and objective aspects of well-being. In the last few years, various measures of individual well-being have been increasingly analyzed. The reason is that gross domestic product (GDP) is no longer considered the most reliable measure for determining people's happiness and well-being. As a matter of fact, there are a number of other aspects, apart from the economic ones, which have a positive effect on increasing the well-being and happiness of people. The main goal of this final paper is to explain everything that affects the well-being and quality of citizens' life, and in order to achieve this goal, various aspects of objective and subjective well-being will be analyzed. In the end, the purpose of this paper is to draw a conclusion about the effects on the happiness of the citizens of a country in general, that is, about the aspects that affect it. The aim of this paper is also to investigate whether Croats are happy people and what they should work on to improve their situation when it comes to happiness.