HAPPINESS
This statistic is compiled from responses to the survey question: "Taking all things together, would you say you are: very happy, quite happy, not very happy, or not at all happy?". The "Happiness (net)" statistic was obtained via the following formula: the percentage of people who rated themselves as either "quite happy" or "very happy" minus the percentage of people who rated themselves as either "not very happy" or "not at all happy".
SOURCE: World Values Survey 2005 http://www.worldvaluessurvey.org/

LIFE SATISFACTION
Most scores are based on responses to the following question: "All things considered, how satisfied or dissatisfied are you with your life-as-a-whole now? 1 dissatisfied to10 satisfied" (item code O-SLW/c/sq/n/10/a). Scores of ten nations are based on responses to a somewhat different question: "Suppose the top of the ladder represents the best possible life for you and the bottom of the ladder the worst possible life. Where on this ladder do you feel you personally stand at the present time?" The response was rated on a ladder scale ranging from 0 to 10 (item code O-BW/c/sq/l/11/c). We transformed the scores using the information of nations in which both this item and the above question on life-satisfaction had been used in about the same years.
SOURCE: World Database of Happiness, Happiness in Nations, Rank Report 2004/1 Average happiness in 90 nations 1990-2000

Sources:
http://www.nationmaster.com/graph/lif_hap_net-lifestyle-happiness-net
http://www.nationmaster.com/graph/lif_lif_sat-lifestyle-life-satisfaction

Screenshots: