The Thomas Theorem is a sociological concept formulated by William Isaac Thomas and Dorothy Swaine Thomas in 1928. It states that if people define situations as real, those situations have real consequences. This means that individuals' perceptions and beliefs can shape their actions and the outcomes of social interactions, regardless of the objective reality. For example, if a group of people believes that a neighborhood is unsafe, they may avoid it, leading to decreased business and community engagement. Thus, the Thomas Theorem highlights the importance of subjective interpretations in social behavior and the impact of beliefs on societal dynamics.