Another Analysis of the EEOCC “Four-Fifths” Rule

Published Online:https://doi.org/10.1287/mnsc.25.8.770

Federal guidelines provide grounds for determining when a racial, ethnic or sex group has experienced discrimination in selection or promotion. This paper assumes that a predetermined number of people are selected or promoted and presents a simple model that computes the exact probabilities of type I and type II errors, that is, concluding adverse impact when none exists and concluding no adverse impact when it does, in fact, exist.

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