The potential psychiatric benefits of laughter are a common topic of lay conversation. Humor may be either a cause or a consequence of emotional transformation. It is a consequence in that after a situation has been normalized or the emotional pain in it has been reduced, this emotional distance can enable humor to be perceived. That is, as one gets a better perspective on a formerly painful situation, one may then be able to laugh about it.
On the other hand, humor may be a cause of emotional reevaluation in that situations, which have been perceived as emotionally painful and which have not been normalized, may be cognitively and emotionally recategorized as normal or acceptable through the humorous experience of the violation in the situation. Humor requires that the situation be seen as normal, and if an individual who never before could find certain violations acceptable is able to see them humorously, perhaps by sharing a joke-teller's sympathetic and elevated viewpoint, then the situation will be seen as normal, thus transforming the experience into a less painful one. This can only have lasting effects, of course, if mental recategorization is sufficient to effect the transformation. If there are inherent problems or permanent or recurring troublesome issues in the situation itself, where the problems cannot be eliminated by turning a symbolic switch, then of course these are not avoided or eliminated by a temporary humorous re-interpretation of the situation.
Thus humor can be positively transforming, because previously painful or threatening things are seen during their humorous interpretation as normal or unremarkable, thus acceptable, and non-threatening. In this way, humor can have the useful function of liberating people from V interpretations. However, it is equally true that humor can have the opposite transforming effect, too, as when a person discovers he is the object of laughter (being the object of laughter means being responsible for the perceived violation), and reinterprets what had seemed a normal and unremarkable experience as one in which he has been negatively judged -- demeaned and degraded.
Thus humor can have both positive and negative effects, and in general is a two-edged sword. It is possible that in one and the same situation, where person A laughs at something person B says, either effect may occur. B may infer that A believes B to be responsible for a moral violation, and thereby may take offense at being laughed at. On the other hand, B may consider that A sympathetically shares B's understanding of the violation in the situation, which is not imputed to be B's fault, and then B may infer that A thinks it's not really so bad, and B can be much relieved by A's laughter. In this way, either the violation judgment, or the normality judgement implied by A's humor perception, can have offense-producing, or normalizing results. For A to ensure one interpretation rather than the other in an ambiguous situation, A must provide additional disambiguating cues which B may use to decide which is the appropriate interpretation.