This question is based on Thursday's breakout room. Suppose employers care about overall productivity Z, which is made up of two components, X and Y, such that Z=X+Y (and employers know this productivity function). Suppose there are two groups (male and female) whose average Zs are the same (i.e. Z_M =Z_F), but X_M < X_F and Y_M > Y_F (and again, employers know these population averages). (Averages are given by bold font.) Researchers decide to run a resume-based audit study where they randomize names based on gender (using typically male or female names) but hold constant Y. They provide no information on X. Which of the following would suggest taste-based discrimination?

1. The call-back rate is the same for both sexes.
2. The call-back rate is higher for men than for women
3. We can't use differences in call-back rates to find suggestive evidence of taste-based discrimination because there's too many other factors that are different across the resumes.
4. The call-back rate is higher for women than for men