Based on the theory of happiness study from an economic perspective, adopting 1,894 samples data of urban and rural residents in Zhejiang Province, this article first uses the method of factor analysis to research into the main factors which affect the residents' happiness index and then the structural equation model to study the relationships of each factor. Secondly,it establishes a 3-scale measuring index system for the residents' happiness index and then measures the residents' single happiness index, impact factors index and overall happiness index as well. Finally, the article gives some suggestions and policies to improve the people' happiness index.
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