Last year Switzerland topped the World Happiness Report, a study by the UN-commissioned Sustainable Development Solutions Network which aims to quantify happiness as a means of influencing government policy.
But this year the Swiss have less to be happy about as the country drops to number two, behind Denmark.
The two countries have been vying to be the world's happiest since the report was first published in 2012.
The 2016 report, published on Wednesday in advance of UN World Happiness Day on March 20th, ranks 156 countries by their happiness levels based on surveys covering the years 2013-15.
The data focused on GDP per capita, life expectancy, health, welfare services, corruption levels, freedom of choice and generosity.
Switzerland achieved a score of 7.509 this year, against the average of 5.1. Denmark was only narrowly ahead on 7.52.
In the 2016 report, the countries in the top ten were the same as in last year's edition but the ordering changed slightly. After Denmark and Switzerland followed Iceland, Norway, Finland, Canada, Netherlands, New Zealand, Australia and Sweden.
The United States came 13th and the UK 23rd.
“The consistency at the top reflects mainly that life evaluations are based on life circumstances that usually evolve slowly, and that are all at high levels in the top countries,” said John Helliwell, a professor at the University of British Columbia and one of the editors of the report.
Switzerland regularly does well in studies on happiness and quality of life.
On World Happiness Day last year Switzerland topped the table – in a four-way tie with Denmark, Sweden and Finland – of a Eurostat study on life satisfaction in Europe.
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Last month Swiss city Zurich topped the table of Mercer's 2016 Quality of life survey, with Geneva also rating highly.
In December 2015 happiness at home, health and good personal relationships were named the things the Swiss most wished for in 2016, according to a survey by the Swissfuture research institute.
Respondents showed a high level of optimism regarding their personal lives, said the study.