Worked example · EX:economics-and-market-foundations/separate-model-fact-value-and-decision

Separate model, fact, value, and decision

Audit a model based recommendation by labeling its implication, missing observation, explicit criterion, feasible alternatives, and decision authority.

Updated Aug 7, 2026 Review due Nov 7, 2026
On this page
  1. Recommendation under review
  2. Relabel the chain
  3. Improve the decision record
Worked-example setupScope and assumptions
  • Cedar Transit and its capacity model are fictional.
  • The model's assumptions are stated, but no observed pilot or empirical causal estimate is supplied.
  • The board has identified service reliability as its criterion, compared three feasible alternatives, and retained decision authority.
Period
Fictional next-year capacity plan
Units
Binary claim-support indicators: 1 means the stated condition is met; 0 means it is not
Rounding
Exact binary indicators

Recommendation under review

Cedar Transit's capacity model predicts that adding a scheduling team will reduce missed-service risk under its stated demand, staffing, and response-time assumptions. The board has chosen service reliability as its criterion, identified three feasible staffing alternatives, and retained authority to select among them. No pilot or empirical causal estimate is supplied.

An analyst writes: “The scheduling team reduced missed service and is therefore the correct plan.” The first verb is wrong: no observed intervention occurred.

Relabel the chain

  • Model implication: under the stated assumptions, the scheduling-team alternative produces the best modeled reliability result.
  • Observation: none is supplied about an implemented team.
  • Causal estimate: none is supplied about what the team would cause in practice relative to a credible comparison.
  • Normative criterion: the board explicitly prioritizes service reliability, subject to the stated budget and labor constraints.
  • Conditional recommendation: the model, criterion, alternatives, and authority support recommending the team conditional on the assumptions.

The verified audit marks the conditional recommendation as structurally supported. That does not transform the modeled effect into an observed fact.

Improve the decision record

Rewrite the conclusion as follows:

Under the stated demand, staffing, and response-time assumptions, the model ranks the scheduling-team alternative highest on the board's declared service- reliability criterion. The board may select it conditionally, but should test demand sensitivity, implementation capacity, labor constraints, and a pilot measurement plan. No realized reduction or causal effect has yet been observed.

The distinction preserves a useful recommendation while making its stop conditions and next evidence visible.

Verified calculation · economics foundations analysis

The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.

claim audits
1 field
Inspect data
{
  "cedar_capacity_recommendation": {
    "causal_design_supplied": 0,
    "decision_authority_identified": 1,
    "feasible_alternatives_compared": 1,
    "model_assumptions_stated": 1,
    "observation_supplied": 0,
    "value_criterion_stated": 1
  }
}

Recomputed result

Values recomputed by the curriculum loader
MeasureValue
causal claim supported0
descriptive claim supported0
model implication supported1
normative criterion visible1
recommendation supported1
unsupported causal jump0
unsupported normative jump0