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

Question

Quizplus · Accepted Answer

Statistical discrimination occurs when insurers use group characteristics, like 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.

Statistical Discrimination in the Automobile Insurance Industry Means That Young