Skip to Content
Commentary

How Statistical Discrimination May Be Costing Your Practice

Falling victim to statistical discrimination may be hurting your bottom line and steering clients away.

Statistical discrimination is our tendency to believe something about a group of people based on a perceived group average. These beliefs don’t necessarily have to come from a prejudiced point of view; instead, they are an example of our minds using a cognitive shortcut.

When we meet someone for the first time, our minds fill in presumed details about them based on the only information we have available at that time: how they look--which can be a result of their race, gender, age, and so on. Once we mentally place this person into a group, we then attribute certain characteristics to them based on what we believe is typical of this group. To give an example using animals, if we encountered a new cat, we might believe that this cat hates water because that’s a common stereotype attributed to cats.

To view this article, become a Morningstar Basic member.

Register for Free