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"How much did Santa's sled cost? Nothing, it was on the house."

This quip is met by moans that echo through a warehouse in the capital.

We're at a humor-evaluation meeting with a company that makes products for social events. Its repertoire features festive crackers.

The company's founder smiles, nearly sheepishly at the gag. But the pun has made the cut and will feature in upcoming crackers.

"The success is gauged by the gag by the number of moans and the intensity of the groans around the table," the founder says.

The key to a good holiday cracker pun is not the same as a stand-up joke per se. It is entirely about the setting - in this case, the shared laughter of the holiday dinner table with grandparents, kids and potentially friends.

"You want the gag to be something that brings the eight-year-old together with the grandparent," she adds.

The Neuroscience Of Shared Laughter

Gathering to enjoy communal laughter is not only nothing new, experts say, it is likely to be older than humanity.

"So when you are laughing with others at the Christmas table you are dropping into what's very likely a really primordial mammal play sound," says a professor.

Shared amusement, she says, helps make and maintain social connections between individuals.

Researchers have found that a absence of such social exchanges can seriously damage both psychological and bodily health.

"The people you converse with, and share laughter with, it leads to enhanced amounts of endorphin uptake," the professor continues.

These natural chemicals are the body's "happy chemicals" and are produced both to reduce tension and discomfort and in response to pleasurable experiences, such as chuckling with friends over a particularly awful festive cracker joke.

"You're not just laughing at a foolish pun with a Christmas cracker," she says. "You are in fact performing a lot of the truly important work of building, preserving the social bonds you have with those you love."

What Occurs In the Mind?

But what is actually happening within the mind when we listen to a gag?

A tremendous amount happens in reaction to humour, it turns out.

Using functional magnetic resonance imaging (fMRI), a type of brain scanner which indicates which parts of the mind are more active, researchers have been able to map the regions that receive more blood flow.

Testing involves imaging the minds of healthy participants and then subjecting them to a collection of funny phrases, paired with either a neutral sound, or pre-recorded chuckles.

"In the scanner we observed a very fascinating pattern of activation," notes the neuroscientist.

A gag activates not just the areas of the mind responsible for hearing and interpreting speech, but also neural regions associated with both preparation and starting motion and those linked to sight and recall.

Combine these elements together, and people listening to a joke have a complex set of neural reactions that underpin the amusement we hear.

The Contagious Nature of Chuckles

Researchers found that when a funny phrase is combined with chuckles there is a greater reaction in the mind than the same phrase when accompanied by a neutral sound.

"This activation occurred in areas of the mind that you would employ to contort your face into a grin or a laugh," she says.

It means people are not just responding to funny jokes, they are reacting to the laughter that follows them.

Laughter, says the expert, can be infectious.

So what does this imply for the laughter heard at a holiday gathering?

"People laugh harder when you know people," she notes, "and you laugh more when you like them or care for them."

When it comes to Christmas cracker jokes, she says, the positive effect is more likely to be triggered not by the gag itself, but from the response to it.

"It's the laughter. The joke is the terrible Christmas cracker joke, and it's just a reason to chuckle as a group."

The Search for the Perfect Festive Pun

Will we ever find the perfect gag?

Likely not, but that has not stopped researchers from trying to.

Years ago, a psychologist established a scientific project for the world's most humorous gag.

Over 40,000 jokes later, with ratings lodged by hundreds of thousands of participants globally, he has a clearer understanding than many as to what succeeds and what does not.

The perfect festive cracker joke must be short, he explains.

"But they also need to be bad jokes, jokes that make us groan," he continues.

The increasingly "awful" the gag, he states the better.

"The reason is that if nobody finds it funny – it's the joke's shortcoming, not yours.

"The fascinating part about the Christmas cracker puns is that not one person considers them funny.

"It creates a common experience around the table and I think it's lovely."