Legatum Institute's 2014 Prosperity Index ranked Denmark as the fourth most prosperous country in the world, trailing only Norway, Switzerland and New Zealand.
The rankings are based on eight variables of a country's prosperity performance:
• Personal freedom
• Social capital
Denmark's best performance was in the entrepreneurship and opportunity index, where it ranked second behind only neighbouring Sweden. The study pointed to the country's low business start-up costs, estimated at just 0.2 percent of gross national income. Denmark's worst performance came in the economy index, ranking 18th.
The fourth place ranking was two spots better than last year, but two spots below the second place ranking achieved every year between 2009-2012.
"Denmark has seen some good improvements in economy, entrepreneurship, education and social capital. In particular, it improved five places in the economy category and in entrepreneurship there was also improvement, just not enough to move up from number two," Novella Bottini, an economist at the Legatum Institute, told The Local.
According to the study, 96 percent of Danes say they can rely on others in times of need and 84.3 percent feel that Denmark is a good place to live for immigrants. The number in the latter category has been on the decline.
"You can see a decreasing trend in the last three years - it was 89 percent in 2011 and now it is 84 percent, so you could say that situation seems to be getting worse," Bottini said.
Just 13.9 percent of Danes thought corruption in business and government was widespread. In the Central African Republic, the least prosperous country in the world according to the study, that number is at 75 percent.
The study, now in its eighth year, offers a unique insight into how prosperity is forming and changing across the world.
The index takes into account 142 countries, representing more than 96 percent of the world's population and 99 percent of global GDP.
Prosperity Index: Top 20
3 New Zealand
10 United States
13 United Kingdom
20 Hong Kong
France was just outside the Top 20 in 21st place, Spain was 26th and Italy was The Local's poorest performing country in 37th place.