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.
The Effects of Information on Product Quality: Evidence from Restaurant Hygiene Grade CardsPhillip Leslie and Ginger Jin ,
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Quarterly Journal of Economics