Simulacrum Levels are a framework for analyzing different motivations people can have for making statements.

Simulacrum Level 1: Attempt to describe the world accurately.
Simulacrum Level 2: Choose what to say based on what your statement will cause other people to do or believe.
Simulacrum Level 3: Say things that signal membership to your ingroup.
Simulacrum Level 4: Choose which group to signal membership to based on what the benefit would be for you.

One way to test which level someone is on is what would make them say the opposite of what they say now:

Level 1: If they see enough evidence in the opposite direction.
Level 2: If people begin responding the opposite way to the same statement.
Level 3: If your group starts saying the opposite.
Level 4: If you benefit more from saying the opposite.

More descriptions of the four levels:

By Strawperson:

Level 1: “There’s a lion across the river.” = There’s a lion across the river.
Level 2: “There’s a lion across the river.” = I don’t want to go (or have other people go) across the river.
Level 3: “There’s a lion across the river.” = I’m with the popular kids who are too cool to go across the river.
Level 4: “There’s a lion across the river.” = A firm stance against trans-river expansionism focus grouped well with undecided voters in my constituency.

By Zvi:

Level 1: Symbols describe reality.
Level 2: Symbols pretend to describe reality.
Level 3: Symbols pretend to pretend to describe reality.
Level 4: Symbols need not pretend to describe reality.

A concrete example of the above from Michael Vassar:

Level 1: A court reflects justice.
Level 2: A corrupt judge distorts justice.
Level 3: A Soviet show trial conceals the absence of real Soviet courts.
Level 4: A trial by ordeal or trial by combat lacks and denies the concept of justice entirely.

Zvi describes the four children of the Seder (Passover) as the four (and one extra) simulacrum levels:

Level 1: The wise child.
Level 2: The wicked child.
Level 3: The simple child.
Level 4: The one who does not know how to ask.
Level 5: The one who is not there.

"The wicked understand, acknowledge and value the Wise—they depend on the Wise for their own cynical gain. The simple don’t see the point of wisdom. Those who do not know how to ask don’t even know wisdom is a thing." —The Four Children of the Seder as the Simulacra Levels

The origin of this framework is in Simulacra and Simulation by sociologist Jean Baudrillard.