The Science of Word Recognition, or how I learned to stop worrying and love the bouma, by Kevin Larson, discusses in detail “the history of why psychologists moved from a word shape model of word recognition to a letter recognition model.” The conclusion:
Given that all the reading research psychologists I know support some version of the parallel letter recognition model of reading, how is it that all the typographers I know say that we read by matching whole word shapes? It appears to be a grand misunderstanding. The paper by Bouma that is most frequently cited does not support a word shape model of reading…
Word shape is no longer a viable model of word recognition. The bulk of scientific evidence says that we recognize a word’s component letters, then use that visual information to recognize a word. In addition to perceptual information, we also use contextual information to help recognize words during ordinary reading, but that has no bearing on the word shape versus parallel letter recognition debate. It is hopefully clear that the readability and legibility of a typeface should not be evaluated on its ability to generate a good bouma shape.
(Thanks to P. Kerim Friedman for the link, and my congratulations to him for being the #1 Google hit for “kerim”!)