Disclosure Policies in Inspection Programs: The Role of Specific Deterrence

Matthew Makofske

MPRA Paper from University Library of Munich, Germany

Abstract: In inspection programs, policies of disclosing inspection performance promote greater compliance via general deterrence—i.e., by increasing the expected cost of regulatory violations. Yet, despite their growing popularity as regulatory aids, an unexamined matter is how specific deterrence—deterrence that follows from receiving punishment—might influence the effectiveness of disclosure policies. In Las Vegas, Nevada, food-service health inspections are scored numerically. Using a simple grading scale, scores are then coarsened into letter grades which restaurants must prominently display. There is, however, a wrinkle to this grading scale: establishments committing the same violation in consecutive inspections are downgraded one letter. By virtue of this downgrade rule, punishment assignment varies among identically scored inspections. Relative to establishments with identical sequences of prior inspection scores, I find that restaurants are assessed 17-27% fewer demerits following a downgrade. This substantial specific deterrence effect has important implications for the design of disclosure policies; particularly, regarding the coarsening of numeric scores into letter grades.

Keywords: disclosure; regulatory inspection; coarsening; letter grades; restaurant hygiene (search for similar items in EconPapers)
JEL-codes: I18 K32 L15 (search for similar items in EconPapers)
Date: 2020-07-18
New Economics Papers: this item is included in nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/102002/1/MPRA_paper_102002.pdf original version (application/pdf)

Related works:
Journal Article: Disclosure policies in inspection programs: The role of specific deterrence (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:102002

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().