Working Paper: NBER ID: w21170
Authors: Christopher S. Carpenter; D. Sebastian Tellotrillo
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.
Keywords: Commonsense Consumption Acts; Tort Reform; Fast Food; Obesity; Health Outcomes
JEL Codes: I12; I18; K13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Commonsense Consumption Acts (CCAs) (D18) | likelihood of heavy individuals reporting attempting to lose weight (C83) |
| Commonsense Consumption Acts (CCAs) (D18) | healthy food consumption (D18) |
| Commonsense Consumption Acts (CCAs) (D18) | exercise participation (C90) |
| Commonsense Consumption Acts (CCAs) (D18) | employment in fast food restaurants (J63) |
| Commonsense Consumption Acts (CCAs) (D18) | number of company-owned McDonald's restaurants (F23) |
| Commonsense Consumption Acts (CCAs) (D18) | number of franchise-owned McDonald's restaurants (F23) |