The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards

摘要: This study examines the effect of an increase in product quality information to consumers on firms' choices quality. In 1998, Los Angeles County introduced hygiene grade cards be displayed restaurant windows. We show that cause (i) health inspection scores increase, (ii) consumer demand become sensitive changes restaurants' quality, and (iii) number foodborne illness hospitalizations decrease. These results imply restaurants make improvements. The regulatory change also provides opportunity separately analyze effects mandatory disclosure voluntary cards, because some cities posting is at discretion. find from are statistically different, but not economically disclosure.