The Thatcher effect or Thatcher illusion is a phenomenon where it becomes more difficult to detect local feature changes in an upside-down face, despite identical changes being obvious in an upright face. It is named after British former Prime Minister Margaret Thatcher on whose photograph the effect was first and most famously demonstrated. The effect was originally created by Psychology Professor Peter Thompson in 1980.
The effect is illustrated by two originally identical photos, which are inverted. The second picture is obviously altered so that the eyes and mouth are vertically flipped, though the changes are not immediately obvious until the image is viewed in normal orientation.
This is thought to be due to specific psychological cognitive modules involved in face perception which are tuned especially to upright faces. Faces seem unique despite the fact that they are very similar. It has been hypothesised that we develop specific processes to differentiate between faces that rely as much on the configuration (the structural relationship between individual features on the face) as the details of individual face features, such as the eyes, nose and mouth. As Lewis and Johnston demonstrated, when a face is upside down, the configural processing cannot take place, and so relational differences that are obvious when upright are difficult to detect when inverted.
This effect is not present in people who have some forms of prosopagnosia, a disorder where face processing is impaired, usually acquired after brain injury or illness. This suggests that their specific brain injury may damage the process that analyses facial structures.
There is plenty of evidence that rhesus monkeys  as well as chimpanzees (Weldon et al., 2013) exhibit the Thatcher effect, raising the possibility that some brain mechanisms involved in processing faces may have evolved in a common ancestor more than 30 million years ago. It has also been shown that young children demonstrate the illusion just as strongly as adults. 
The basic principles of the Thatcher Effect in face perception have also been applied to biological motion. The local inversion of individual dots is hard, and in some cases, nearly impossible to recognize when the entire figure is inverted.
- Thompson, P. (1980). Margaret Thatcher: a new illusion. Perception. doi: 10.1068/p090483
- "Reading Upside-down Lips". faculty.ucr.edu. Retrieved 11 April 2013.
- Lewis, M.B. & Johnston, R.A. (1997). The Thatcher Illusion as a test of configural disruption. Perception, 26, 225-227. doi: 10.1068/p260225
- Adachi Ikuma, Chou Dina P., Hampton Robert R. 'Thatcher Effect in Monkeys Demonstrates Conservation of Face Perception across Primates', Current Biology 2009, 19, 1270–1273
- Dahl Christoph D, Logothetis Nikos K, Bülthoff Heinrich H, Wallraven Christian 'The Thatcher illusion in humans and monkeys', Proceedings of the Royal Society B: Biological Sciences, 2010, 277 (1696)
- Lewis, M.B. (2003). Thatcher’s children: Development and the Thatcher illusion. Perception, 32, 1415-1421. Doi:10.1068/p5089
- Mirenzi A, Hiris E, 2011, "The Thatcher effect in biological motion" Perception 40(10) 1257 – 1260
Weldon, K. B., Taubert, J., Smith, C. L., & Parr, L. A. (2013). How the thatcher illusion reveals evolutionary differences in the face processing of primates. Animal Cognition, doi:10.1007/s10071-013-0604-4
- Carbon, C. C., & Leder, H. (2005). When feature information comes first! Early processing of inverted faces. Perception, 34(9), 1117-1134.
- Sjoberg, W., & Windes, J. D. (1992). Recognition times for rotated normal and 'Thatcher' faces. Perceptual and Motor Skills, 75(3, Pt 2), 1176-1178.
- Stuerzel, F., & Spillmann, L. (2000). Thatcher illusion: dependence on angle of rotation. Perception, 29(8), 937-942.
- Lewis, M. B. (2003). Thatcher's children: Development and the Thatcher illusion. Perception, 32(12), 1415-1421.
- Rouse, H., Donnelly, N., Hadwin, J. A., & Brown, T. (2004). Do children with autism perceive second-order relational features? The case of the Thatcher illusion. J Child Psychol Psychiatry, 45(7), 1246-1257.
- Carbon, C. C., Grüter, T., Weber, J. E., & Lueschow, A. (2007). Faces as objects of non-expertise: Processing of Thatcherised faces in congenital prosopagnosia. Perception, 36(11), 1635-1645.
- Carbon, C. C., Schweinberger, S. R., Kaufmann, J. M., & Leder, H. (2005). The Thatcher Illusion seen by the brain: An event-related brain potentials study. Cognitive Brain Research, 24(3), 544-555.
Evidence from nonhuman species
- Adachi, I., Chou, D.P., Hampton, R.R., Thatcher Effect in Monkeys Demonstrates Conservation of Face Perception across Primates, Current Biology (2009), doi:10.1016/j.cub.2009.05.067.
- Dahl, C.D., Logothetis, N.K., Bulthoff, H.H., Wallraven, C., The Thatcher illusion in humans and monkeys, Proceedings of the Royal Society B: Biological Sciences (2010), 277 (1696), doi:10.1098/rspb.2010.0438.