Requiring restaurants in Los Angeles to post their cleanliness scores reduced hospital admissions for food-related illnesses by 20%, according to a study forthcoming in the Quarterly Journal of Economics. (Those with access to the Wall Street Journal can see David Wessel’s May 29 account here.) The Health Department inspections themselves were well-established; the only thing that was new was the requirement that the grades be posted. Not only did patrons shift from less-clean to more-clean restaurants, the resulting market pressure led restaurants as a group to (literally) clean up their act.
Question for the libertarians in the audience: on the facts as given, is the regulation requiring disclosure justified?