Statistical discrimination in the automobile insurance industry means that young male drivers who drive __________ will pay __________ rates relative to the number of claims they generate.

Question

Quizplus · Accepted Answer

Statistical discrimination occurs when insurers use demographic factors, such as age and gender, to set rates. Young male drivers, even if they drive carefully, are statistically more likely to be involved in accidents, leading to higher rates relative to their actual claims.

Statistical Discrimination in the Automobile Insurance Industry Means That Young