What levels of transaction isolation exist in PostgreSQL and how do they differ?

PostgreSQL supports four transaction isolation levels defined by the SQL standard:

1. Read Uncommitted — the lowest isolation level. Allows reading data that has not yet been committed (dirty reads). In PostgreSQL, it effectively behaves like Read Committed, as it does not support dirty reads.

2. Read Committed — the default level. A transaction sees only data that was committed at the moment each individual query was executed. Non-repeatable reads can occur, where re-reading the same data within a transaction yields different results.

3. Repeatable Read — a transaction sees all data as it was at the start of the transaction. Guarantees that re-reading the same data will produce the same result. Phantom reads are possible, where new rows added by other transactions may appear in subsequent queries.

4. Serializable — the strictest isolation level. Ensures complete transaction isolation as if transactions were executed sequentially. Prevents phantom reads and other anomalies. May lead to transaction rollbacks in case of conflicts.

Example of setting the isolation level in SQL:

BEGIN TRANSACTION ISOLATION LEVEL REPEATABLE READ;
-- operations
COMMIT;

Thus, the choice of isolation level depends on the application's requirements for consistency and performance.