Overview
Happiness gained from houses, food, wood, families and jobs.
Basic needs
Villagers need houses, food and wood. That gives every villager a happiness of 50%. If any of this is missing, happiness drops fast until villagers leave (after 2-3 days).
Note:
Villagers can take food and wood either out of the boxes in their houses or out of the storage buildings. They cannot take them out of production buildings or from the ground.
If you don´t have storage buildings, you yourself need to put food and wood into the boxes in the houses to keep them stocked. Once you have built a food storage building and a material storage building, your workers (wood cutter, hunter, field worker…) will automatically put food and wood into the storage buildings.
It is not necessary to assign workers to the storage buildings as shop keepers. Right now shop keepers don´t do any work.
Villagers eat raw vegetables, but they do not eat raw meat, only cooked meat or soup etc.
Villagers can use any type of wood for heating their houses. If they have a choice, they use sticks and firewood before they use logs.
50% happiness is enough to make your villagers stay and work, so there is no need to raise villager happiness further. Productivity seems to depend on skill level, not on happiness. Still, villagers can become more happy than that and it´s fun to see smiling faces.
Houses
Building a house with stone walls adds 11% happiness (simple small house and simple house) or 12% happiness (house) for all its inhabitants. (Plan the house, stand in front of the template with your hammer equipped and press “e”. Then you get the option to choose the wall type.)
Upgrading house walls with clay daub raises happiness 3% further. (Craft daub in barn from clay and straw. With you hammer equipped right click and select “improve”.) Edit: Since the latest update, for improving stone walls you need limestone. (There are some rocky areas, some in and around Gostovia, that say “You need a pickaxe to mine stone here.” If you mine there, you get stone and limestone.)
Added up, that´s plus 15% happiness for villagers living in an improved house with stone walls.
If the house needs repair, happiness drops by 1%.
Families
If you assign one man and one woman to a house, after a while they will start liking each other and their happiness rises by 5%.
Then the woman has a baby and both parents get an additional 5% happiness.
Houses have room for 4 people, so villagers can have a second child and become 5% more happy again.
Added up, that´s plus 15% happiness for parents of 2 children.
Children get plus 20% happiness. While the mother stays home with the child, she gets plus 25% happiness.
Your wife gets the same 5% bonus when marrying you plus 5% when having a child. But she can only have one child, even if there is room for two.
(Don´t know about grandchildren yet.)
Alcohol?
The tier 3 tavern has a barrel, but crafting is not yet implemented.
Please let me know if you found out anything else!
Jobs
Since the latest update, villagers also gain happiness by being employed in a job they are good at. The higher the skill level matching the job, the more happiness the villager gains, 2% per skill point up to plus 20% happiness at level 10.