Australia is the 18th happiest country in the world, according to a report released this week.

Gallup Inc conducted interviews with around 1,000 people in 138 countries, aged 15 and over, to see if they laughed, smiled, felt respected, experienced enjoyment or felt well rested the day before.

The results were then tabled in a global positive experience index.

Overall, the world is the happiest it has been since Gallup began tracking positive emotions eight years ago.

The global positive experience index was 71 out of 100.

Latin America dominates

Countries from Latin America outstripped their Western counterparts when it comes to happiness.

Nine of the world's 10 happiest countries are from Latin America, with Paraguay taking out the top position for the third year in a row with a score of 87.

20 happiest countries in the world 1. Paraguay 2. Panama 3. Guatemala 4. Nicaragua 5. Ecuador 6. Costa Rica 7. Colombia 8. Denmark 9. Honduras 10. Venezuela 11. El Salvador 12. Indonesia 13. Philippines 14. Thailand 15. UAE 16. Canada 17. New Zealand 18. Australia 19. Chile 20. Argentina

Panama was a close second with a score of 86, while Guatemala, Nicaragua and Ecuador rounded out the top five with a score of 83.

The report says the dominance of Latin American countries "at least partly reflects the cultural tendency in the region to focus on the positives in life".

Australia received a score of 79, ranking it 18th, one place below New Zealand and one place above Chile. Neighbouring Indonesia was in 12th place.

For the second year in a row Syria was ranked last for positive emotions, with a score of just 36 in the index. The score is an all-time low in the index.

The research found fewer than one in three Syrians reported feeling well rested, learning or doing something interesting or feeling enjoyment.

Perhaps money can buy happiness

The report has also found people who make more money tend to report higher positive emotions.

There was a 10 percentage point gap between the highest and lowest income brackets.

However, the report notes that other research has found a higher income can improve a person's overall happiness, but only up to $75,000.

Above that, it says income makes less of a difference.