The Case in Support of Restaurant Hygiene Grade Cards

Throughout the United States, consumers rely on local health authorities to regulate and inspect restaurants in an attempt to assure that high-quality hygiene standards are maintained. Few people would argue that this is unimportant. If hygiene were left unregulated and unmonitored, it is likely that restaurant workers would shirk in their efforts to maintain good hygiene, and customers would generally have little idea that their meals may have been prepared without meeting appropriate health standards. Of course, not all restaurants would be irresponsible in this way, but it only takes one shirking restaurant to give rise to a public health emergency. How effective are the regulations and inspections by public health authorities at assuring good-quality restaurant hygiene? We have studied restaurant hygiene and the role played by health inspections in Los Angeles County over a three-year period (1996–1998). Our research indicates that restaurant hygiene regulations and inspections are a fairly imperfect device for assuring good-quality hygiene. However, in January 1998 the Department of Health Services (DHS) in Los Angeles implemented a critical change in their regulations that led to a dramatic improvement in restaurant hygiene—restaurants were henceforth required to display prominently in their window a letter-grade card (A, B, or C) corresponding to the result of their most recent DHS hygiene inspection. We analyzed a variety of different data to assess the effects of these grade cards on restaurant hygiene, restaurant revenue, restaurant prices and output, behavior of DHS inspectors, and, most importantly, the occurrence of foodrelated illnesses. We also explored the differential effects of the grade cards on different types of restaurants. Weak Incentives for Good Hygiene in the Absence of Grade Cards