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Algorithmic Bias in Automated Decision-Making: A Statistical Study with Legal and Regulatory Implications

Shaik Afsar Jahan
Lovely Professional University, India
Mohammad Shahfaraz Khan
University of Technology and Applied Sciences-Salalah, Oman
Imran Azad
University of Technology and Applied Sciences-Salalah, Oman
MurtazaM. Junaid Farooque
Dhofar university, Salalah -Oman
S Sindhuja
SRM Institute of science and technology, India
A.K Abidha
B S Abdur Rahman Crescent Institute of Science and Technology Vandalur, chennai
Amir Ahmad Dar ORCID
Department of Statistics, Lovely Professional University, Jalandhar 144411, India
Shaik Afsar Jahan ORCID
Department of Statistics, Lovely Professional University, Jalandhar 144411, India
Mohammad Shahfaraz Khan ORCID
College of Economics and Business Administration, University of Technology and Applied Sciences-Salalah, Salalah 211, Oman
Imran Azad ORCID
College of Economics and Business Administration, University of Technology and Applied Sciences-Salalah, Salalah 211, Oman
Murtaza M. Junaid Farooque ORCID
Department of MIS, College of Commerce and Business Administration, Dhofar University, Salalah 211, Oman
S. Sindhuja ORCID
Department of Mathematics, SRM Institute of Science and Technology, Chennai 600089, India
A. K. Abidha ORCID
Department Mathematics and Actuarial Science, B. S. Abdur Rahman Crescent Institute of Science and Technology, Chennai 600048, India

Received: 19 January 2026; Revised: 23 February 2026; Accepted: 9 March 2026; Published: 9 April 2026

Abstract

The use of algorithmic decision systems is being expanded to high-risk areas like credit, recruiting, and distributing government resources. Despite the fact that these systems are usually claimed to be objective and efficient, there have been apprehensions about the likelihood of structural inequalities being perpetuated by the systems. This paper examines the effect of a fairness-aware pre-processing technique called reweighing on the performance of a predictive system in a controlled simulation environment. Using a synthetically created credit approval dataset with structural disadvantage embedded, we compare the performance of a logistic regression classifier with and without reweighing. Fairness is measured using demographic parity disparity (DPD), disparate impact ratio (DIR), and equalized odds difference (EO), along with predictive accuracy. In a single test scenario (seed = 42), reweighing does not improve all fairness metrics uniformly. However, when analyzed for robustness across 50 independent random seeds, we find modest average reductions in demographic parity disparity and equalized odds difference for reweighing, with little change in predictive accuracy. Threshold sensitivity analysis also shows that fairness metrics are sensitive to decision thresholds. These results show that fairness-aware pre-processing can lead to systematic improvements in expectation, although trade-offs across fairness metrics and performance remain context-dependent.

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