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Showing posts from March, 2016

Food hygiene ratings and the full disclosure principle

In 2013 a system was introduced in Wales where restaurants and food outlets were required to display food hygiene ratings for all to see. This has seemingly led to an increase in food hygiene , prompting calls for the system to be extended across the UK. But is it necessary to force restaurants to display the rating? Textbook models of signalling would suggest not. Here's why:           Restaurants are rated on a 6 point scale ranging from a cockroach infested 0 to very good 5. All restaurants have to be rated and so this is not at issue. The question is whether they should be forced to prominently display the rating. With that in mind, consider the incentives of restaurant owners:         It is easiest to start with a restaurant that got a top, 5 rating. Clearly the owners have an incentive to display the high rating and show off how good the are. So they will likely display the rating whether forced to or not.           What about a restaurant with a 4 rating? You might th