Adverse Impact Ratio

aka “Disparate Impact Ratio”, the “AIR” is a measure of fairness used by regulators and courts to assess how often protected groups receive a positive outcome, e.g. approval for a loan, compared to a control group. Although there are no concrete fairness thresholds, many industry participants consider an  AIR of over 90% to be satisfactory, anything from 80-90% to be concerning, potentially triggering regulatory scrutiny, and anything less than 80% to be practically significant disparity resulting in elevated regulatory risk.