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Do ‘Cheeseburger Bills’ Work? Effects of Tort Reform for Fast Food

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  • Christopher S. Carpenter
  • D. Sebastian Tello-Trillo

Abstract

After highly publicized lawsuits against McDonald’s in 2002, 26 states adopted Commonsense Consumption Acts (CCAs) – aka ‘Cheeseburger Bills’ – that greatly limit fast food companies’ liability for weight-related harms. We provide the first evidence of the effects of CCAs using plausibly exogenous variation in the timing of CCA adoption across states. In two-way fixed effects models, we find that CCAs significantly increased stated attempts to lose weight and consumption of fruits and vegetables among heavy individuals. We also find some evidence that CCAs increased employment in fast food. Finally, we find that CCAs significantly increased the number of company-owned McDonald’s restaurants and decreased the number of franchise-owned McDonald’s restaurants in a state. Overall our results provide novel evidence supporting a key prediction of tort reform – that it should induce individuals to take more care – and show that industry-specific tort reforms can have meaningful effects on market outcomes.

Suggested Citation

  • Christopher S. Carpenter & D. Sebastian Tello-Trillo, 2015. "Do ‘Cheeseburger Bills’ Work? Effects of Tort Reform for Fast Food," NBER Working Papers 21170, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21170
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    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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