The city was ranked joint third with Nottingham. Birmingham came top of the table as the happiest place to live, with Manchester in second place.
London, Edinburgh and Newcastle were ranked joint 11th, whilst the study concluded that the city of Brighton is the least cheerful place to live.
But Hannah Gumbrill, a second-year English Literature student at the University of Sheffield, comes from Brighton and stood up for her home town.
She said: "As someone who is a true Brightonian I have to say that although it has become a bit more like Blackpool in recent years, it is still an amazing place to live.
"Not only does it accept unquestioningly all races, sexualities and fashion senses, but it is packed full with fabulous places to eat, drink and have fun."
The study, commissioned by the National Lottery, examined 16 cities across the UK, measuring residents’ happiness in relation to their average number of friends.
Sheffield’s residents have an average of 36 close friends, with 73 per cent of the population stating that they are ‘very happy’.
Kathryn Axon, Union Welfare Officer, believes it is important to keep in contact with people at home, especially now there are numerous ways of speaking to family and friends.
She said: "Perhaps students can visit their friends at other universities, as well as inviting them to Sheffield."
The University Of Nottingham’s School of Psychology looked at the link between happiness and social activity.
Dr. Richard Tunney, Associate Professor of Psychology at the University of Nottingham, said: "We need to look after our friends if we want to be happy, and happier people tend to have more close friends and make new ones regularly."
The study found that people who were ‘extremely dissatisfied’ with their lives had half the number of friends than those who were ‘extremely satisfied’.
People with fewer than five friends were deemed to have a less than 40 per cent chance of being happy, compared to people with more than 10 friends who are 55 per cent more likely to be happy.
The study does come with a note of caution. Dr. Tunney claims that people should not ignore their old friends in favour of making more.
He said: "It is more important to maintain the relationships that you already have."
Hannah Lyons
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