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The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards
Open accessAbstract
This study examines the effect of an increase in product quality information to consumers on firms' choices of product quality. In 1998 Los Angeles County introduced hygiene quality grade cards to be displayed in restaurant windows. We show that the grade cards cause (i) restaurant health inspection scores to increase, (ii) consumer demand to become sensitive to changes in restaurants' hygiene quality, and (iii) the number of foodborne illness hospitalizations to decrease. We also provide evidence that this improvement in health outcomes is not fully explained by consumers substituting from poor hygiene restaurants to good hygiene restaurants. These results imply that the grade cards cause restaurants to make hygiene quality improvements.
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Cites
The Market for "Lemons": Quality Uncertainty and the Market Mechanism
Akerlof, G. A. (1970) · The Quarterly Journal of Economics · doi:10.2307/1879431 · Cited by 23,016
Good News and Bad News: Representation Theorems and Applications
Milgrom, P. R. (1981) · The Bell Journal of Economics · doi:10.2307/3003562 · Cited by 3,123
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Imbens, G. W., & Wooldridge, J. M. (2009) · Journal of Economic Literature · doi:10.1257/jel.47.1.5 · Cited by 4,926
Mandatory CSR and sustainability reporting: economic analysis and literature review
Christensen, H. B., Hail, L., & Leuz, C. (2021) · Review of Accounting Studies · doi:10.1007/s11142-021-09609-5 · Cited by 1,923
LEUZ, C., & WYSOCKI, P. D. (2016) · Journal of Accounting Research · doi:10.1111/1475-679x.12115 · Cited by 1,760
Identification and Inference in Nonlinear Difference-in-Differences Models
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Fung, A., Graham, M., & Weil, D. (2007) · doi:10.1017/cbo9780511510533 · Cited by 752
Metadata
- Authors
- Jin, G. Z., & Leslie, P.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2003-05-01
- Volume
- 118
- Issue
- 2
- Pages
- 409-451
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W3123632404
- Cited by
- 886
- References
- 2
- FWCI
- 31.58
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
