According to the Laughter Yoga International website, the method originated in 1995 when Dr. Madan Kataria, having written on the health benefits of laughter, convened a group of students in a Mumbai, India park to test whether incorporating regular laughter into people's lives would improve their well-being. Though at first he relied on telling jokes to get the laughter started, he soon discovered that simulating laughter (chanting HO HO HO and HA HA HA) offered the same benefits as (and often led to) the real thing. A student of yoga, Kataria also incorporated deep breathing and simple stretches into his sessions.
Medical research has suggested that laughing is a good way to reduce stress and stimulate the release of the body’s feel-good hormones (endorphins), and Kataria’s Laughter Clubs, as well as other forms of laughter therapy, are popping up all over. Kataria even offers laughter conference calls for those who don’t have a local Laughter Club.
Sources:
Laughter Yoga International: www.laughteryoga.org
Laughter Research Conducted at Loma Linda University Medical Center. March 11, 1999

