Properly managing these factors can affect your dweller's happiness. Happy dwellers are efficient and produces resources faster. You'll also get a higher daily evaluation. Your dwellers' happiness will remain stable and the only major way that they'll become unhappy is when there's a corpse in the same room they're working on. This will cause their happiness level to plummet until the corpse is removed or revived.
The average happiness of your Dwellers will be rated and will affect your vault's overall happiness level. You'll get a resource boost when the overall happiness of the vault is high.