Happiness is an issue that has been investigated by different branches of science for a long time. The factors that cause happiness and the relationships among these factors attract the attention of researchers. Happiness can be directly related to the person himself; it is also affected by external factors such as environment, place, time and income. Recently, studies on happiness in the field of Economics have also increased. International independent research organizations are conducting studies that measures happiness, and they publish the results they obtain on a yearly basis in reports. Each report tries to make sense of happiness by emphasizing one aspect of happiness. The aim of this study was to reveal the effect of Income and Democracy, which is considered to have an effect on happiness, on happiness. The Structural Equation Modeling (SEM) technique, which is one of the multivariate statistical techniques, was used to measure this contribution. With this aim, happiness data in the World Happiness Report published by the United Nations were used. Income data were collected from the World Bank, and Democracy index values were collected from the World Democracy Report published by The Economist. In the study, for the latent variable, the indicators of social support, healthy life expectancy, social freedom, and perception of corruption, that are associated with happiness in the world happiness report, were considered as the subfactors of the latent variable. As a result of the study, it was concluded that happiness was strongly affected by income and weakly affected by democracy. Furthermore, it was concluded that there was a moderate relationship between democracy and income. From this point of view, it can be predicted that countries with high economic potential can make their citizens happier by strengthening their democracy.