Snapshot

Counterfactuals, incentives, welfare, distribution, evidence, uncertainty and decision-focused communication.

Module status

• •Track: Shared economics
• •Last verified: 2026-07-31
• •Scope: Independent archive and training. Official notices, field pages and candidate messages prevail.

Analytical sequence

A strong policy analysis separates question, baseline, mechanism, evidence, distribution and uncertainty. It identifies the counterfactual before attributing an observed change to policy.

Incentives and behaviour

Prices, taxes, subsidies, regulation and information affect choices through incentives and constraints. Elasticity determines how strongly quantities respond. Incidence depends on relative responsiveness, not on who formally pays a tax.

Welfare and distribution

Efficiency analysis compares benefits, costs and distortions. Distributional analysis asks who gains, who loses, when effects occur and whether impacts differ by income, region, age, firm size or exposure.

Evidence quality

Correlation alone does not establish causality. Credible empirical work explains identification, measurement, sample selection, functional form, robustness and external validity. Statistical significance does not by itself establish policy importance.

Uncertainty

Forecasts should state central estimates, ranges, assumptions and scenario sensitivities. Model precision cannot remove structural uncertainty or unobserved future shocks.

Policy communication

Decision material distinguishes facts, estimates, assumptions and recommendations. It explains trade-offs in plain language while keeping quantitative units, time horizons and baselines explicit.