The Toilet Paper Test is simple: If you're at home and you need to buy toilet paper, can you do so conveniently without using a vehicle?
If you can, odds are you live in an area that's walkable enough for many of your daily needs to be handled on foot. If you can't, you probably have to rely a lot on something with wheels to get around.
An imperfect test, but a handy proxy
Objectively, walkability is hard to quantify. True walkability takes a combination of mixed land uses like shopping and homes, plus great urban design like safe sidewalks and welcoming architecture.
Taking all that into consideration is cumbersome, if not impossible. Developing a robust methodology and then actually having enough data to use it takes a lot of money and time. Walk Score is one such measurement method, but even Walk Score has faced criticism for not matching on-the-ground perception.
The Toilet Paper Test is obviously limited. It makes no assessment of what kind of place you may have to walk through to buy your TP, nor of what else you can or can't do on foot. And different people may define "conveniently" differently. The test undoubtedly results in a lot of false positives and negatives, and unreliable data.
But for its many weaknesses, the TP test's great strength is that it's an easy proxy. It's a simple pass/fail question that virtually everyone can answer themselves, in their head, right away. No complicated formula or hard-to-access data required.
You can ask a room full of 100 people to raise their hands if they pass, and instantly get a simple sense of the walking habits of the group. Or you can answer the question silently to yourself when deciding on a place to live. It's useful in ways that more methodologically sound methods like Walk Score may not always be.
Does your home pass?