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

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  • Ginger Zhe Jin
  • Phillip Leslie

Abstract

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.

Suggested Citation

  • Ginger Zhe Jin & Phillip Leslie, 2003. "The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(2), pages 409-451.
    • Handle: RePEc:oup:qjecon:v:118:y:2003:i:2:p:409-451.
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    File URL: http://hdl.handle.net/10.1162/003355303321675428
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