I’ve always thought that “personal space” isn’t how much people are willing to make physical contact with each other, but rather the unseen “bubble” of space that people keep between each other when interacting with others. If you are standing facing someone and they are standing just on the edge of your personal bubble, you will tend to feel comfortable with that – in fact, it will probably seem so normal, you won’t think anything of it. If they are standing well outside your bubble for no apparent reason, you will likely feel that they are cold and distant. If they stand too close within your bubble, you will feel they are crowding you. It is fairly well documented that the size of this “bubble” varies greatly from country to country, and I do still believe that it has a great amount to do with the space available within that country.
A friend of mine taught in South Korea, and she said that she constantly felt crowded there. People are packed in like sardines in the larger cities (or so it seems to a rural Canadian), no-one has any space or real privacy there, with multiple generations all crowded together in a single house together, and they even have “love motels” for couples to go to for a few hours of privacy out of mom and grandma’s earshot. It’s common for a son to move his new wife into the house with his mother, grandmother(s) and sister(s). They have a very small personal space bubble, but the same time, they are very reticent about showing emotion or physical contact in public. As mentioned by ark_a_dong above, Canadians have very large bubbles of personal space. At the same time, there are a lot of Canadians that regularly greet each other with hugs, but if you simply stand six inches from them for no apparent reason, they’ll feel you’re being pushy. I still believe that peoples’ comfort with physical contact is more of a cultural thing, and the personal space variance springs from demographics.