In his intriguing book of short stories, Twins, writer Chris Gregory explores the difference between narrative fiction and real life. "Gradually I realised that the real world was flawed in ways that were not and could not be reproduced in a book of fiction." Similarly, Alfred Hitchcock said that a good story was "life, with the dull parts taken out" and, while Samuel Beckett might disagree, dialogue follows the same pattern: it's human conversation without the ums and ahs.

Dialogue is, of course, distinct from conversation. While people have conversations, characters have dialogues – and, ideally, every piece of dialogue in a story is a means to a narrative end. In real life, conversations can be purely pragmatic, or solipsistic; sometimes they're nothing more than an antidote to silence, sounds to fill the quiet margins of our social lives.

Writers approach the challenge of dialogue in different ways. Some try to evoke the natural rhythms of speech. Hemingway uses clipped speech to great effect; his characters rarely talk for long enough to start sounding unnatural. Here's a marvellous passage from Indian Camp:

"Do many men kill themselves, Daddy?"

"Not very many, Nick."

"Do many women?"

"Hardly ever."

"Don't they ever?"

"Oh yes. They do sometimes."

Other writers use dialogue in the same way they use formal narration: to express profound ideas in complex language with scant regard for realism. I recently read the following piece of dialogue in a novella and was struck by how unrealistic it sounded. Who the devil speaks like this? I wondered (without the devil bit).

"The very thought of it made my entire universe begin to shake. The reality of the deep abyss into which I was falling now became all too apparent to me."

Taken out of context it seems an appalling piece of dialogue. It's certainly unrealistic, but so what? The novella, Karnak Café, by Egyptian Nobel prize winner Naguib Mahfouz, is a gripping story abut Egypt's socio-political turmoil in the 1960s. Throughout the book, only recently translated into English, every character speaks with formal precision, as if they were reading in church from a chapter in the Bible, and it does not detract from the power of the story.

Playwrights tend to labour more than novelists over dialogue (for obvious reasons) and their ears are generally sharper. Martin Crimp and Caryl Churchill approximate human speech far better than Martin Amis and Colm Tóibín, but even they are forced to follow the demands of a literary convention which holds that dialogue needs to be driving the story somewhere.

In cinema, Woody Allen writes pitch-perfect dialogue, with all the verbal tics, incomplete thoughts and ellipses of human speech written down on the ... um ... the-the p-page (although almost every character in a Woody Allen film speaks like a version of Woody Allen). But if you want to see how people really talk, just find a verbatim transcript from a television interview. Here's one with Tim Winton, an eloquent man, talking about a near-drowning experience he had:

"And because my uncle wasn't a surfer he just sort of didn't get it with waves. So he tried to outrun the wave. And, um, yeah, we bought it. It was, uh... It was... The last thing that was said on the boat was, 'Hanging five,' by my cousin. And then I was under the boat, trapped. Had fishing line and rope and stuff around my leg and I was kind of drowning. I was sort of in that last moment before, you know... I'm just seeing bubbles, thinking, 'Oh, this is beautiful. This is nice.'"

This is how people actually tell a story - if they are good with language. From the mouth of a less articulate person Winton's story would be a mess, but it would still appear to flow in our mind's ear because as we listened, we'd filter out the superfluous bits and create a fluent narrative. And that fluent narrative would probably be much closer to the way people talk in fiction.

Writers of fiction are told to "listen" to how people speak in order to create realistic dialogue but, like all our perceptions, our hearing is unreliable. We unconsciously filter out the crap in people's speech to refine sense and meaning. What we're left with is a type of distilled speech far removed from the realism of what we hear and, crucially, we rarely notice this until we see it with our own eyes, while reading a transcript of what someone said.

The rubric of realism has loomed over literary theory for almost two centuries now, and writers as varied as Irvine Welsh, David Foster Wallace, James Baldwin and Peter Carey have all experimented with realistic dialogue to great effect. But even so, you can hear the pure realism in narrative dialogue as easily as you can drive a horse and cart out of a Corot painting.

