Which baseline is most useful for evaluating the effect of a shop’s accidental window damage?
Answer & explanation
The likely alternatives using the same resources.
A counterfactual is not directly observed. Its usefulness depends on a defensible account of the alternative choices. Unlimited-resource fantasies would answer a different question.
Economics in One Lesson
Chapter 2 · The Broken Window
AI reviewed · sources pending · version 7
Generally accurate according to an AI review. Sources and this book association have not been verified.