Which of the following is an example of statistical discrimination?
A)Auto insurance providers charge higher premiums to drivers of cars that are more likely to be stolen.
B)The government mandates that all drivers must have auto insurance.
C)Auto insurance providers offer perks to customers who have been with the provider for a longer period of time.
D)All of these are examples of statistical discrimination.

Question

Quizplus · Accepted Answer

Statistical discrimination involves making decisions based on aggregate data or statistics related to a group rather than on individual merits or risks. In choice A, auto insurance providers use statistical data about car theft rates to determine premium costs, which is a direct example of statistical discrimination. Choices B and C involve policy requirements and loyalty incentives, respectively, which do not rely on statistical data about groups for decision-making.

Which of the Following Is an Example of Statistical Discrimination