We use simple economic insights to develop a framework for distinguishing between prejudice and statistical discrimination using observational data. We focus our inquiry on the enormous literature in healthcare where treatment disparities by race and gender are not explained by access,...

Hospitals play a key role in patient outcomes and spending, but efforts to improve their quality are hindered because we do not know whether hospital quality indicators are causal or biased. We evaluate the validity of commonly used quality indicators, such as mortality, readmissions, inpatient...