It is usually a cliche to say laughter is the best medicine. But Barry Cowling, operations manager of Summit Care nursing home in Randwick, said humour therapy had reduced aggression and depression among 18 residents in the secure dementia wing.

''We've had residents where we could reduce psychotropic drugs or have them come off, and we could see benefits to staff with improvements in morale and engagement,'' Mr Cowling said.

His nursing home participated in a three-year study that found weekly visits by clowns, plus the training of staff members to provide humour therapy, significantly reduced agitation among 180 residents in 17 nursing homes compared with a control group.

The effect was similar to that of the average dose of risperidone, a drug used to reduce aggression and agitation among dementia patients, the Sydney Multisite Intervention of LaughterBosses and ElderClowns (SMILE) study found. It also avoided common side effects like stroke.

Results from the study show improvements in levels of depression among residents correlate with the enthusiasm and dedication of nursing home staff trained in humour therapy.

Even before the formal results of the study were known, the changes were so obvious that Mr Cowling decided to make laughter therapy permanent.

''We had a woman who was totally non-verbal … who started to have conversations with staff and with her family.''

These changes were not unusual, said Jean-Paul Bell, a clown and a stand-up comedian who co-wrote the study and is now creative director of the Arts Health Institute.

At a weekly session at Randwick, Mr Bell, his offsider Joanna Weinberg, and a nursing home staff member trained in humour therapy entertained a small group of residents. Ms Weinberg sang and played the piano accordion, ranging from the Beatles' Ob-La-Di, Ob-la-Da to the Sound of Music's Do-Re-Me. Bell mimed and joked.

Before each two-hour session, the entertainers hit Google looking for songs and ideas connected to a resident's life and discuss the residents' week with staff.

Mr Bell talks fondly of a former teacher, Joan, who rarely spoke. He asked her to help with his homework. ''Have you washed your hands?'' she'd ask, the teacher in her wary of sticky fingers.

Is it the humour or the interest in each individual that elicits a response from residents with dementia?

''It's not specifically the humour that's the magic,'' said Lee-Fay Low, a psychologist and senior research fellow with the Dementia Collaborative Research. The most important skill was the ability to engage the person. ''All the time they spend with them increases this ability,'' she said. ''Entertainers are professional engagers, that's what they are good at doing. That's quite a different perspective and skill to those of nurses and others who work in nursing homes,'' said Dr Low, who was a co-author of the SMILE study.

The Arts Health Institute and another organisation, the Humour Foundation, now run humour therapy in nearly 90 nursing homes across Australia.

Its use marks a continuing shift in the treatment of dementia as a disability instead of a disease.

Visiting American psychologist Cameron Camp told ABC radio last week that the diagnosis of dementia was often regarded as the end of learning. ''One of the biggest challenges to good dementia care is … therapeutic nihilism,'' he said.

His organisation is using the Montessori method to teach people with dementia new skills, such as beer making.