Working Paper
| HBS Working Paper Series
|
2018
Digitizing Disclosure: The Case of Restaurant Hygiene Scores
by
Weijia (Daisy) Dai and Michael Luca
|
Abstract
Collaborating with Yelp and the City of San Francisco, we revisit a canonical example of quality disclosure by evaluating—and helping to redesign—the posting of restaurant hygiene scores on Yelp.com. Implementing a difference-in-differences strategy, we find that posting restaurant hygiene scores on Yelp leads to a 12% decrease in purchase intentions for restaurants with low scores (as predefined by the City) relative to those with higher scores. We then create a “hygiene alert”—a message that appears only for restaurants identified by the City as having “poor” operating conditions with “high-risk” hygiene violations (using the same low score threshold as above)—and find a further 9% decrease in purchase intentions. Moreover, the presence of an alert reduces the restaurant’s likelihood of getting a second alert. We conclude that disclosure policy should focus not only on what information to disclose, but also on how and where to design disclosure.
Keywords: Information;
Web;
Quality;
Safety;
Food;
Consumer Behavior;
Outcome or Result;
Food and Beverage Industry;