Counterfactual Analysis

Counterfactual analysis involves imagining what would have happened if a different decision or event had occurred. It helps understand the impact of specific actions by comparing the actual outcome with a hypothetical alternative, essentially asking, “What if?” For example, a company might analyze whether launching a new product led to increased sales by considering what sales would have been without it. This approach helps in decision-making, understanding cause and effect, and optimizing future strategies by exploring different scenarios and their potential outcomes.