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Recall that in the statistical model of discrimination, employers observe , where: . You can think of as test score or GPA. is the true

Recall that in the statistical model of discrimination, employers observe
, where:
. You can think of
as test score or GPA.
is the true productivity of the individual. Recall that
is distributed normal, with mean 0 and variance
. Finally, recall that since employers do not know
, they operate according to the following:
. What happens to
, the weight placed on the observed
, when the variance of the error term,
, increases?

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