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  5. Building Non-Discriminatory Algorithms in Selected Data

American Economic Review: Insights

ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)

Building Non-Discriminatory Algorithms in Selected Data

  • David Arnold
  • Will Dobbie
  • Peter Hull
American Economic Review: Insights (Forthcoming)

Abstract

We develop new quasi-experimental tools to understand algorithmic discrimination and build non-discriminatory algorithms when the outcome of interest is only selectively observed. We first show that algorithmic discrimination arises when the available algorithmic inputs are systematically different for individuals with the same objective potential outcomes. We then show how algorithmic discrimination can be eliminated by measuring and purging these conditional input disparities. Leveraging the quasi-random assignment of bail judges in New York City, we find that our new algorithms not only eliminate algorithmic discrimination but also generate more accurate predictions by correcting for the selective observability of misconduct outcomes.

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