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

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After highly publicized lawsuits against McDonald’s in 2002, 26 states adopted commonsense consumption acts (CCAs)—also known as 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 self-reports of attempts to lose weight and consumption of fruits and vegetables among heavy individuals. We also find some evidence that CCAs increased employment in the fast-food industry. Finally, we find that CCAs significantly increased the number of company-owned McDonald’s restaurants and decreased the number of franchisee-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.

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