Suppose $we$ are interested $in$ whether minority groups are being treated differently $in$ the labor mar$-$

ket. $Y_{i}is$ the individual $i\text{'}s$ hourly wage, and $M_{i}is$ the binary variable $to$ indicate whether the indi$-$

vidual belongs $to$ the minority group $or$ not.

Can $we$ use the following equation $to$ study whether minority groups are being treated differ$-$

ently? Why?

$Y_i={}_0+{}_1{M}_i+lo{n}_i$

Could you describe what the audit and correspondence methods are? Why these two methods

can solve the issues $in$ part $(a)?$

What's the $limitationof$ audit and correspondence methods?

Could you explain some potential sources $of$ discrimination?