On the very early cars with O2 sensors, there was only a single wire for the signal voltage, and the ground went through the screw-in connection in the exhaust.
Wile this might have been a fine connection when the car was new, I recently measured the resistance from the connection point to chassis ground at the ECU, and it as 1100 ohms !!
Now, if the ECU had an extremely high input impedance, the 1100 ohms wouldn't matter much, but the ECU on the 1980 thru 1985 seems to be mostly passive components and resistive voltage dividers, as such I appears that 1100 ohms is enough to offset the calibration of the ECU.
The fix to correct this is simple and about $9. Attach some braided engine grounding strap from the chassis direct to the O2 sensor using a hose clamp.
The result is a good quality ground for the O2 sensor, enabling more stable and accurate operation.
This mod can be done without removing the sensor.
Purchase an engine grounding strap, and a small hose clamp.
Dorman Help! 60213 - Ground Strap | O'Reilly Auto Parts
There is a very convenient place to connect to chassis - the heat shield connection bolt is right over the O2 sensor. Clean the bolt area, and the heat shield, and the shield's bolt.
Reattach the heat shield, connecting the grounding strap to the bolt. open the hose clamp and put it over the sensor. Close it partially and slide it against the exhaust.
Now, wrap the grounding strap round the sensor once, tucking it into the hose clamp. Trim off the excess.
Tighten the hose clamp to about wrist tight - be careful and do NOT over tighten or bend the sensor body.
The completed installation:
Removing the excess resistance should result in the engine running leaner (that is, the ECU commanding a leaner condition). Part of the reason I failed smog recently was a too-rich condition, and i believe this is a contributing factor.