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

This quip is greeted with moans that echo through a warehouse in London.

We're at a joke-testing meeting with a company that produces products for social events. Its catalogue features Christmas crackers.

The firm's founder grins, almost sheepishly at the gag. But the joke has made the cut and will appear in upcoming crackers.

"You measure the joke by the number of groans and the intensity of the groans around the table," she says.

The key to a great holiday cracker joke is not the identical as a good gag in itself. It is entirely about the context - in this case, the shared laughter of the holiday dinner table with grandparents, kids and potentially neighbours.

"The goal is for the joke to be a thing that brings the child in harmony with the 80-year-old," she states.

The Science Behind Shared Laughter

Coming together to experience communal amusement is not only nothing new, scientists say, it is likely to be older than humanity.

"Therefore when you are chuckling with people at the holiday table you are dropping into what's almost certainly a truly primordial mammal social vocalisation," says a neuroscience expert.

Communal laughter, she explains, helps forge and strengthen social bonds between people.

Scientists have found that a absence of these interactions can seriously damage mental and physical health.

"Those you converse with, and laugh with, it results in increased levels of 'happy chemical' uptake," the professor continues.

These natural chemicals are the brain's "feel-good compounds" and are released both to alleviate stress and pain and in reaction to enjoyable experiences, such as chuckling with loved ones over a truly awful festive cracker gag.

"You're not just chuckling at a silly joke with a holiday cracker," she states. "You are actually doing a lot of the truly important work of building, preserving the connections you have with the people you care about."

What Happens Inside the Mind?

But what is actually happening within the mind when we hear a joke?

A tremendous amount happens in reaction to comedy, it transpires.

Using brain scanning technology, a type of brain scanner which shows which parts of the mind are more active, scientists have been able to chart the areas that receive more blood.

Testing involves scanning the minds of volunteer participants and then exposing them to a database of funny words, accompanied by either a neutral sound, or pre-recorded laughter.

"In the scanner we got a very fascinating activation pattern of neural activity," notes the professor.

A joke activates not just the parts of the brain in charge of auditory processing and understanding language, but also neural areas involved in both preparation and starting movement and those involved in vision and memory.

Combine all of this as a whole, and individuals hearing a joke have a complex series of neural reactions that underpin the amusement we experience.

The Contagious Nature of Chuckles

Scientists discovered that when a funny word is paired with laughter there is a stronger reaction in the brain than the same phrase when accompanied by a non-emotional sound.

"This was in parts of the mind that you would use to move your face into a grin or a chuckle," the professor explains.

It indicates people are not just responding to humorous jokes, they are reacting to the laughter that accompanies them.

Laughter, says the expert, can be contagious.

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

"People laugh more when you are familiar with others," she says, "and laughter increases more when you like them or care for them."

When it comes to Christmas cracker puns, she explains, the positive effect is more likely to be triggered not by the joke in itself, but from the response to it.

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

The Search for the Perfect Festive Pun

Will we ever discover the perfect joke?

Probably not, but that has not stopped experts from trying to.

In 2001, a psychologist established a research search for the planet's most humorous gag.

More than 40,000 gags submitted, with scores lodged by 350,000 people globally, he has a better idea than most as to what works and what does not.

The ideal Christmas cracker pun needs to be brief, he says.

"They must also be poor gags, puns that cause us to moan," he continues.

The more "awful" the joke, he says the better.

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

"What's interesting about the Christmas cracker jokes is that none of us find them humorous.

"That's a common moment around the table and I believe it's wonderful."