Statistical Discrimination is (Probably) Bad
A while back I wrote a post suggesting that it would be better if people didn’t statistically discriminate (i.e., refused to use information on the average characterists of a group when making judgments about individuals from that group). The idea (not original to me) was that an individual from a group with bad average characteristics will lack an incentive to invest in improving since they won’t be judged on their individual merits anyway. Various comments and discussions and trackbacks have generated a few further thoughts:
1. There is no guarantee that a refusal to discriminate will increase economic efficiency; for that to be true, it would have to be the case that the benefit of improved investment incentives outweighs the cost of discarding useful information.
2. The benefit of a refusal to discriminate increases if you place any weight on the normative proposition that everyone deserves to be judged on their own merits.
3. The benefit also increases if you believe that discrimination leads to alienation and various forms of costly anti-social behavior in the discriminated-against group.
4. Bryan Caplan suggests that statistical discrimination is at least mitigated, and possibly eliminated, by the fact that high-attribute individuals in groups with low average attributes have an incentive to “counter-signal” by taking some action to show that they are in fact high attribute. It is true that the possibility of counter-signalling will mitigate the harm from statistical discrimination, but I don’t see how it can ever make it go away. Someone who bears both the direct cost of investment and the additional cost of counter-signalling will have less incentive to invest than someone who bears only the direct cost. Furthermore, counter-signalling may not be cheap; it’s pretty darn costly to write a dissertation under an advisor known for high-tech mathematics just to show you don’t suck at math if you didn’t want to write with that guy anyway, you may just decide to punt and go to law school instead. Finally, the problem may accumulate over an individual’s life as each investment not made makes the next one costlier until the point where an investment that would otherwise have been possible no longer is.
Discrimination. We need it, to some extent. We have to be able to tell the difference between good and bad, and there are certain characteristics of a person that provide tell-tale signs that the person is good or bad. However, the bad thing about discrimination is that people become "profilers" in that they pick up initial vibrations or characteristics, and then pre-maturely judge that person as either good or bad without really giving the person a chance. Like, a person can be really good, but you observe this person smoking crack. The person can still be really good, but buys and smokes it privately without letting it on, dealing it, or sharing it. Not that crack is good, but the person's dependancy on it doesn't harm anyone else but himself. On that note, we can make the judgement that even though the crack habit is bad, the person is harmless. On the other hand, though, his dealer...Discrimination is also used against black people in the form of a stereotype. "All tall black men play basketball," is a good example. There are many false conclusions that can come out of this, one of which is that a "tall black man uses basketball as a crutch to get through life." Which could mean, in essence, that "tall black men are unable to effectively learn, therefore, as long as they are good at basketball, an education is unnecessary."I am a salesman. So, I might be selling products in a neighborhood, and the entire neighborhood has discriminated against me because of my choice of profession. I am turned away at the door because, "all salesmen are crooks."Here's a good one that Criminal Minds had a habit of characterizing. "All skinny white men with glasses are serial killers or perverts." Although, one of the profilers is a skinny, paranoid, master mind of forensic science, the same conclusion without any further knowledge can be made about him. His fictional history, is actually, that as a high school student, he was raised by his bi-polar, agrophobic mother who was also schizophrenic. Though he was not any of those things, he "acted out" the character in his childhood until he finally was able to overcome it through forensic science to become one of the greatest crime-solving profilers in history. If we, as run-of-the-mill, judgemental people, had actually encountered this man early in his life, we would have tossed him to the drug dealers, making the assumption that he was a worthless human being. Then, he might have ended up some kind of perverted, serial killer.Interesting. How many people have YOU turned into killers due to false judgements on their characters?
The top paragraph seems like a straight-forwards recommendationto sacrifice one's own welfare, in the hope of encouraging alarge-scale social aim. It seems rather like a recommendationto donate money to some worthy charity.