Which Tolkien essay presents his theory of the value and function of fairy stories?

Tolkien’s essay on the value and function of fairy stories is On Fairy-Stories.

Tolkien first delivered the material as the Andrew Lang lecture at the University of St Andrews in 1938. A revised version was published in 1947 and later collected with Leaf by Niggle in the volume Tree and Leaf.

In the essay, Tolkien discusses what he calls the “fairy-story” tradition and identifies important functions including fantasy, recovery, escape, and consolation. He also presents his idea of “sub-creation,” through which an author builds a secondary world with its own internal consistency.

The essay is not a retelling of a particular folktale and is not the same work as Beowulf: The Monsters and the Critics. It is one of Tolkien’s clearest statements about why imaginative literature matters.