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Detecting Adverse Impact

The present study compares the detection of adverse impact using the four-fifths rule and the ZD-test. We identified the boundaries that delineate where the four-fifths rule is more or less sensitive than significance testing in the detection of adverse impact. We further considered the practical effects of both criteria by comparing the number of minorities that need to be hired to avoid adverse impact. Finally, we discuss the various issues that researchers and practitioners must recognize in choosing an adverse impact criterion.