In a classic study led by Nobel Prize-winning psychologist Daniel Kahneman, a group of 909 working women kept detailed logs of their moods and day-to-day activities. While differences in income up to $60,000 had little effect on happiness, the results showed, a poor night's sleep was one of two factors that could ruin the following day's mood. (The other was tight deadlines at work.)
Another study reported higher marital happiness among women with more peaceful sleep, although it's hard to say whether happy people sleep better or good sleep makes people happier. Most likely, it's some combination of the two.
Insomniacs are also twice as likely to develop depression, and research suggests that treating sleep problems may help successfully treat depressive symptoms.