But Danes remain close on the tail of their northern neighbours on the list.
Having come top of the pile in both 2016 and 2013, Denmark is now listed at number two on the social happiness list, which is calculated using measures for factors like levels of caring, freedom to make life decisions, generosity, good governance, honesty, health and income.
Norway has been named the world's happiest country for the first time, taking the title from its Scandinavian neighbours. Iceland and Switzerland complete the top four.
The 155 countries in the World Happiness Report, produced since 2012 by the Sustainable Development Solutions Network, include employment, income inequality, life expectancy, GDP per capita, lack of corruption in government and business, and social support.
The report is compiled using Gallup polls, which ask people to evaluate various aspects of their lives on a scale from 0 to 10.
All of the top four countries ranked highly in the main factors considered to support happiness - caring, freedom, generosity, honesty, health, income and good governance - said the World Happiness Report on its website.
Denmark's overall score came out at 7.522, a fraction behind Norway on 7.537.
Denmark and Norway's other Scandinavian neighbour, Sweden, stayed at tenth on the list, while the United States dropped from 13th to 14th. The United Kingdom meanwhile was rated 19th.
One of the reasons for the good performance of Nordic countries in the happiness report is the sense of community in societies, according to its lead author.
“It's the human things that matter. If the riches make it harder to have frequent and trustworthy relationship between people, is it worth it? The material can stand in the way of the human,” John Helliwell, the lead author of the report and an economist at the University of British Columbia in Canada, told the Associated Press (AP).
Although Denmark lost a title it has retained regularly in recent years, there were no hard grapes amongst happiness researchers in Copenhagen.
"Good for them. I don't think Denmark has a monopoly on happiness," Meik Wiking, chief executive officer of the Happiness Research Institute in Copenhagen, who wasn't part of the new study, told AP.
"What works in the Nordic countries is a sense of community and understanding in the common good," Wiking said.
The study of happiness has become an academic field that has gained focus in recent years – the World Happiness Report contains an entire chapter on relative data for policymakers.
The makers of the report say on their website that it “continues to gain global recognition as governments, organizations and civil society increasingly use happiness indicators to inform their policy-making decisions”.
The happiest countries in the world
8) New Zealand