Annie Murphy Paul writes in the NYT about “Your Brain on Fiction”

The brain, it seems, does not make much of a distinction between reading about an experience and encountering it in real life; in each case, the same neurological regions are stimulated. Keith Oatley, an emeritus professor of cognitive psychology at the University of Toronto (and a published novelist), has proposed that reading produces a vivid simulation of reality, one that “runs on minds of readers just as computer simulations run on computers.” Fiction — with its redolent details, imaginative metaphors and attentive descriptions of people and their actions — offers an especially rich replica. Indeed, in one respect novels go beyond simulating reality to give readers an experience unavailable off the page: the opportunity to enter fully into other people’s thoughts and feelings.

http://www.nytimes.com/2012/03/18/opinion/sunday/the-neuroscience-of-your-brain-on-fiction.html?pagewanted=2&_r=1&%2362;&ref=general&src=me

J.K. Rowling had that one figured out long ago:

“Tell me one last thing,” said Harry. “Is this real? Or has this been happening inside my head?”
Dumbledore beamed at him, and his voice sounded loud and strong in Harry’s ears even though the bright mist was descending again, obscuring his figure. “Of course it is happening inside your head, Harry, but why on earth should that mean it is not real?”

As did Vladimir Nabokov