Statistical discrimination is the result of imperfect information and can occur as long as information is imperfect.

Question

Quizplus · Accepted Answer

This statement is true. Statistical discrimination occurs when individuals are sorted into groups based on observable characteristics (such as race, gender, or age) that are proxies for unobserved characteristics (such as productivity or risk). This type of discrimination can occur when there is imperfect information and individuals or firms rely on stereotypes or generalizations to make decisions about others. As long as information is imperfect, statistical discrimination can occur.

Statistical Discrimination Is the Result of Imperfect Information and Can