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Various items and events raise and lower the happiness of your villagers. Besides achievements, what gameplay effects does low or high happiness bestow?

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Happiness makes your workers more productive. Specifically they idle less often.

Source

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Do you know by how much? – walrus helmet Feb 20 '14 at 22:52
    
No, the dev didn't do a very good job of making it clear how much impact various effects have on productivity. However if you want a source, its the in-game help – Lawton Feb 20 '14 at 23:19

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