Here's a question it seems worth travelling the length of the country to ask: do we laugh because we are happy, or are we happy because we laugh?

Keith Adams, who runs the Carlisle Laughter and Happiness Club, is in no doubt about the answer. "Oh, we fake it before we make it," he tells me, with a chuckle: "The more you laugh, the happier you become!"

Adams, a former RAF officer now aged 70, has only been running his happiness club for a year, though he's been a laughter therapist (to corporations and women's institutes and everything in between) for a lot longer. In Carlisle he started out with one member; now his giggling disciples number 30 or 40. Next month he will lead a laughter ramble around a local tarn – "We tend to do a bit of skinny-dipping laughter to get the ball rolling," he explains.

With this experience, I'd hoped that Adams (clearly, given his natural sunniness, no relation) might also be able to shed some light on last week's nationwide survey conducted by the property website Rightmove, which concluded that the residents of England's last city before Scotland were the most contented in Britain. What is Carlisle's secret?

"A lot of people, even up here, were surprised by that news," Adams says. "But I wasn't. You see, I'm from Suffolk originally, I came here about 22 years ago. As an incomer I can observe people. Carlisle is a place where people really connect, both with each other and their surroundings. Size has something to do with it [Carlisle is a city of about 70,000 people] and geography [though highly accessible by road and rail, it is surrounded on all sides by some of the most glorious landscapes in the Lakes and border country]. But I think it goes deeper than that."

Rightmove's survey, which interviewed 25,000 people, was weighted a bit towards the affordability of housing, as well as considering such vagaries as a sense of security, home and community. Carlisle, where you can buy a six-bedroom house for £250,000 and apparently never want to move, scored highly across the board (my own patch, north London, where £250,000 might buy you a one-bedroom flat, was firmly rooted in the relegation zone of the cheerfulness league, along with most of the rest of the capital). All of the happier postcodes were northern cities and towns of a certain size – York, Harrogate, Chester, Huddersfield – and travelling up from rush-hour Euston on Friday morning, with all that data in my head, felt a little like a quest to a promised land. By the time the Virgin locomotive passed Lancaster and was easing into the Eden Valley, I was looking for a Wordsworth app on my iPad.

At Carlisle station, it was threatening sleet. There is a dull glower to the redundant industrial architecture around the old railway viaduct, and a vamped-up station hotel now caters a little desperately to citybreakers. Still, as I headed in through the great rounded towers of the old city walls, I couldn't help noticing a certain joie de vivre; in the high road, English Street, old friends seemed routinely to be greeting one another as if auditioning for the 1950s; couples, old and young, were stepping out arm in arm; in the main square, flanked by independent shops as well as the usual chains, parents took time out to play hide-and-seek with toddlers. Were they always so carefree, I wondered, or had the survey just made it seem so?

Adams, who has put in his time at wellbeing workshops and knows the "science" of jolly, suggests it is more the former. He points at some of the classic attributes that make Carlisle a good candidate for contentedness. The presence of wildness on the doorstep, and the resultant sense of a connection with the natural world, was one. Even on a grey Friday in February, the big Cumbrian skies are a powerful presence. This is a city you can always see the edges of.

One lifelong resident I spoke to, Liz Robson, a retired machinist and nursery nurse, put this well: whenever she returned from the night glare of Manchester, she says, "I know I am home because here all the lights are out."

Another clue to Carlisle's relative elation, Adams says, lies in its vibrant media; he points to its crucial role as a forum and social glue during the foot and mouth outbreak of 2001 and the floods of 2005. In the way that regional newspapers seldom are these days, the Cumberland News group, with its weekly broadsheet and daily tabloid, is strongly visible in the city, along with BBC Radio Cumbria.

In coffee shops those sitting alone, in my small sampling exercise, were more likely to be engaged in smoothing out local news pages than fiddling with screens or phones.

Anne Pickles, associate editor of the Cumberland News, was one of several columnists to reflect with irony on the nationally endorsed capacity for joy in the borders – "It's being so miserable that keeps the smiles on our faces," she wrote. But at her office in the centre of town, she is in no doubt about the truth of some of the findings. "There is a special quality of life here. I grew up in Leeds, but I didn't really understand what community was until I came here. I used to think Yorkshire people were blunt, but here they really call a spade a shovel. If you need any help with anything at all, though, people are there for you without question.

"The city has been hit by public service cuts of course, but in the main they get on with things, take a risk on a small business. You don't need to be told by government about big society here, it just happens. Almost everyone volunteers for something."

As a local journalist, the sense of connection is a gift: you know exactly who you are writing for and representing. The obverse of it, Pickles says, is that nothing happens fast: "Change is debated from every possible angle, because people care so strongly about all the detail of their environment, the landscape."

Not for nothing, by Rightmove's reckoning, are the people of Carlisle more likely than any other population of this island "to spend their money on non-essential home improvements". The border people, with a past rooted in Romans and Reivers, have always been keen on stout walls. The defensive instinct has sometimes led to a reputation for wary insularity, but even that, I'm told, on my brief happiness tour, is breaking down.

In the Friday night drinker's territory of Botchergate, I meet Saj Ghafoor, who runs a spice shop and halal butchers. Ghafoor is a kind of one-woman cultural revolution. She came to Carlisle aged seven, the daughter of Pakistani parents, and was often "the only brown face in class".

"There weren't too many minorities in this city, and those that were kept themselves to themselves, really," she says. She decided seven years ago, with her husband, to open her shop as a kind of metaphor for mixing. "Everyone who came in, Polish, Nigerian, Bengali, whatever, we tried to introduce them to others."

Eventually, this informal process became the Carlisle Culture Bazaar, a do-it-yourself annual celebration of all of the city's diversity. Ghafoor puts on a video of last year's event, which was attended by several thousand locals. Ex-Gurkhas are doing Scottish reels with farmers, tweedy types are contemplating henna tattoos, there is mass zumba.

"There was a terrible loneliness for some of the people who came to this city," Ghafoor says, "and a lot of misunderstanding. I thought, we can go on like this or we can put out a hand. When we did we found it was welcomed; the culture bazaar has given everyone a lot more understanding of who they live among. And more than that, it's brilliant fun."

One thing about laughter is that you find the best kind in unexpected places. You don't have to spend long in Carlisle to see it has its share of problems, but Ghafoor seems aptly named. After we've met, and I'm scanning the Cumberland News property pages with a growing smile of north London disbelief before heading for the train, she texts me: "I am surrounded by beautiful hearts and minds, in a city steeped in history." And a surprising thought has just come to her: "Carlisle is home!"