Consider the statistical discrimination graph of how the signal y relates to the employers 'best guess' of true productivity, E(ly). The quality of the signal is better for group W, so Bw > BB. The groups have the same average μ > 0. W E[0|y] (1 - Въм White Black f

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Consider the statistical discrimination graph of how the signal y relates to the employers 'best guess' of
true productivity, E(ly). The quality of the signal is better for group W, so Bw > BB. The groups have the
same average μ > 0.
W
E[0|y]
(1 - βυ)μ
(1 - Вw)u
White
μ
Black
y
To be hired for the job, the employer wants someone whose expected productivity is above average, so
E(Oly)>μ. If y becomes a better predictor for group B than it was before, and the same quality of predictor for
group W, what happens to the minimum y that someone from group B needs to be hired? Hint: µ stays the
same. Select all possible answers. [NOTE: would need to clarify at or above average vs strictly above average.]
The minimum y that someone from group B needs to be hired becomes larger
The minimum y that someone from group B needs to be hired becomes smaller
The minimum y that someone from group B needs to be hired stays the same [correct if
threshold=mu]
The minimum y that someone from group B needs will still be larger than that for group W
The minimum y that someone from group B needs will become smaller than that for group W
Transcribed Image Text:Consider the statistical discrimination graph of how the signal y relates to the employers 'best guess' of true productivity, E(ly). The quality of the signal is better for group W, so Bw > BB. The groups have the same average μ > 0. W E[0|y] (1 - βυ)μ (1 - Вw)u White μ Black y To be hired for the job, the employer wants someone whose expected productivity is above average, so E(Oly)>μ. If y becomes a better predictor for group B than it was before, and the same quality of predictor for group W, what happens to the minimum y that someone from group B needs to be hired? Hint: µ stays the same. Select all possible answers. [NOTE: would need to clarify at or above average vs strictly above average.] The minimum y that someone from group B needs to be hired becomes larger The minimum y that someone from group B needs to be hired becomes smaller The minimum y that someone from group B needs to be hired stays the same [correct if threshold=mu] The minimum y that someone from group B needs will still be larger than that for group W The minimum y that someone from group B needs will become smaller than that for group W
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