Thinking Fast, Thinking Wrong: Intuitiveness Modulates LLM Counterfactual Reasoning in Policy Evaluation

arXiv:2604.10511v1 Announce Type: new Abstract: Large language models (LLMs) are increasingly used for causal and counterfactual reasoning, yet their reliability in real-world policy evaluation remains underexplored. We construct a benchmark of 40 empirical policy evaluation cases drawn from economics and social science, each grounded in peer-reviewed evidence and classified by intuitiveness -- whether the empirical finding aligns with (obvious), is unclear relative to (ambiguous), or contradict