In this study we explore the determinants of happiness as well as analyze its relationship with economics, social matters and family factors with respect to policies. The gist of happiness can be assessed with stages of income levels of the nations and also with reference to different types of other variables that determine the behaviours of individuals directly or indirectly. We construct indices for Happiness, Economic, Social, Demographic, Environmental and Governance indicators through Principal Component Analysis (PCA). We compare the level of happiness among countries in different income categories that is, low income, low middle income, high middle income, and high income categories according to World Bank classification. The empirical investigation uses panel data of 56 countries for three waves of WVS for the years 1994, 1999 and 2004. The PCA is used to construct indices. For empirical investigation we used OLS, Pooled Regression model with common and Fixed Effect model and then GMM. We explored different level of happiness for all income categories. We have found that the correlates of happiness for different categories of income affect differently.