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

Christopher Carpenter and Daniel Tello-Trillo

No 21170, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I12 I18 K13 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-agr, nep-law and nep-lma
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Citations: View citations in EconPapers (5)

Published as Christopher S. Carpenter & D. Sebastian Tello-Trillo, 2015. "Do Cheeseburger Bills Work? Effects of Tort Reform for Fast Food," The Journal of Law and Economics, vol 58(4), pages 805-827.

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