Suppose two types of students, those from rural areas and those from urban areas, apply to college. There are only two types of performances, excellent and poor. It has been found that a higher percentage of urban students perform poorly than do rural students. The colleges decide to admit only students applying from rural areas. This policy could be referred to as

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This policy is an example of statistical discrimination, which is when an individual or group is treated differently because of a statistical stereotype or generalization about their group, rather than their personal characteristics or qualifications. In this case, the college is assuming that all rural students perform better than all urban students, which is not necessarily true for every individual.

Suppose Two Types of Students, Those from Rural Areas and Those