The ultimate goal in economics of happiness study was to improve the living conditions of people in their everyday life. The dependent variable in this study was happiness among Sabahans which was measured by the 5-point Likert scale meanwhile the independent variables were family relationship, financial situation, work, community and friends, health and government. Questionnaire from The Happiness Initiative was adapted and modified. The study involved 387 respondents chosen based on convenient sampling method. Initially, a Factor Analysis Test was conducted to investigate variable relationship and 50 respondents were questioned for pilot study. The pilot test results showed the tool was reliable and valid. This was followed by the Partial Least Squares method and a Descriptive Study was run to describe the profile of the respondents as well as the score values (mean, standard deviation) of the respondent. The validity of model had further tested using a Confirmatory Factor Analysis (CFA) to assess the magnitude of each dimension to its construct. Finally, a Structural Model Evaluation was conducted to prove the hypothesis. The findings revealed Sabahans’ happiness was found to be influenced by family relationship and work compared to financial situation, community and friends, government and health.Keywords: economic of happiness, happiness, family relationship, financial situation, work, community and friends, health, government