Statistical discrimination and statistical informativeness

Abstract

We study the link between Phelps-Aigner-Cain-type statistical discrimination and familiar notions of statistical informativeness. Our central insight is that Blackwell's Theorem, suitably relabeled, characterizes statistical discrimination in terms of statistical informativeness. This delivers one-half of Chambers and Echenique's (2021) characterization of statistical discrimination as a corollary, and suggests a different interpretation of it: that discrimination is inevitable. In addition, Blackwell's Theorem delivers a number of finer-grained insights into the nature of statistical discrimination. We argue that the discriminationinformativeness link is quite general, illustrating with an informativeness characterization of a different type of discrimination. * We thank Chris Chambers for useful comments.1 For an overview of this literature, including an account of how the Phelps and Aigner-Cain papers differ, see the surveys by Fang andMoro (2011) andOnuchic (2022).