Earning the Grade or Just Window Dressing? The Effects of Information Disclosure on Restaurant Hygiene Quality A Study of New York City Restaurant Hygiene Inspection
نویسندگان
چکیده
This paper explores New York City’s new mandatory information disclosure policy of posting hygiene quality grade cards on restaurant windows. I find that the dual inspection process (initial inspection and re-inspection) has been exploited by restaurants. In particular, after getting an A card in the re-inspection, restaurants frequently revert back to the previous bad hygiene conditions by the time of a subsequent initial inspection. As a result, there is no significant overall hygiene improvement in NYC. Furthermore, I use random effects and ordered logit models to find that the reduction in asymmetric information by hygiene letter grades narrows the difference of hygiene score between chain and non-chain restaurants, which was previously due to greater consumer knowledge of chain restaurants’ reputations.
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