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Caffeine makes people happier and less depressed? Caffeine affects chemicals in the brain just like any other drug. Depression, for some, is due to chemicals imbalances of serotonin and dopamine. 

Caffeine sparks up neurotransmitters, serotonin and dopamine and makes them come alive. Neurotransmitters are what make nerve cells communicate and when they are affected by caffeine, they respond faster. Since they are able to act faster, the neurotransmitter, acetylcholine helps with short-term memory. 

Many find that when they drink coffee they become more alert and able to concentrate better and that is because of this process.