Labor economists distinguish between two forms of discrimination. “Personal discrimination” is a personal preference rooted in a socially unacceptable form of ignorance. A person doesn’t like a group of people out of bigotry.

“Statistical discrimination” is more interesting because it is based in the reality that all of us make important decisions with imperfect and costly-to-obtain information. Out of varying degrees of ignorance, we make choices with the best information available to us at reasonable cost.

Often, our best information about individuals involves their affiliation with groups. So, we stereotype — or “statistically discriminate” — from what we know about a group to members of that group. By definition, all of us discriminate in this manner.

Consider a pool of job applicants. The employer has relatively little information about candidates so the company generalizes from what it does know: Where the applicants went to school, their GPA and field of study, the quality of reference letters, job experience and so on. None of those factors are definitive; they are only somewhat predictive. For example, will someone with a 3.8 GPA be a more productive worker than someone with a 2.8 GPA? Usually, but not always.

Think about the term “prejudice.” Taken literally, it means to “pre-judge,” implying that someone is making a decision with too little information. At times, such decisions are necessary — and it can only be hoped that people do the best they can with the information they have. At other times, it implies an unnecessary rush to judgment.

In the moment of crisis for Professor Gates and Officer Crowley, both parties were making important decisions with limited information. By definition, both were engaged in stereotyping. Of course, it is ironic that Gates did this while self-righteously accusing the police of doing the same. And it is absolutely fascinating that, by their training, both Gates and Crowley were considered “experts” on racial profiling.

Sadly, in judging the events from the outside, many people have been unnecessarily quick in a rush to prejudicial judgments in favor of either Professor Gates or the police. The irony here is greatest among those, including President Barack Obama, who “spoke stupidly” in pre-judgment by accusing Officer Crowley of discrimination.

One of my colleagues reduced the Gates situation to the following: Would a 58-year old man, with the same attire, etc. — but white — have been treated the same way? The question is only somewhat helpful. Interestingly, it sets up potential accusations of age-ism, sexism and “clothes-ism” (or class-ism). Would it have mattered to Officer Crowley if Gates were 18, 38 or 88 years old? Would a similar woman have been arrested in this case? What if Gates had been dressed in a ripped T-shirt or a tuxedo?

At the end of the day, the police and President Obama, those entrusted with the power of government, must make vital decisions with information that is far less than ideal. Again, we can only hope they will do the best they can with what they have — in humility and patience — drawing the best, reasonable inferences from a competent worldview, formidable character and the best available data.

D. Eric Schansberg, Ph.D., is professor of economics at Indiana University Southeast in New Albany and an adjunct scholar with the Indiana Policy Review Foundation. He is the author of “Turn Neither to the Right nor to the Left: A Thinking Christian’s Guide to Politics and Public Policy and the editor of SchansBlog. Contact him at ipr@iquest.net.