Free exchange | Cheeseburger bills

A bit of a pickle

The effects of tort reform on obese Americans

By C.W. | LONDON

Sorry, no tort reform here

IN 2002 Caesar Barber, an obese man, sued McDonald’s and other fast-food firms for making him fat. Their crime, Mr Barber argued, was to withhold nutritional information from their customers. “They never explained to me what I was eating,” he said at the time.

Mr Barber’s case was dismissed. But in response 26 American states adopted “Commonsense Consumption Acts”, commonly known as “cheeseburger bills”, to protect fast-food firms from such lawsuits. By making it clear that the weak-willed could not blame fast-food companies for their girth, the argument went, businesses would not just be protected from frivolous lawsuits. Such laws would also spur people to take more responsibility for what they ate.

A new paper, from two economists at Vanderbilt University, looks at the impact of the new laws.* Since different states adopted cheeseburger bills at different times, disentangling their impact from other factors (such as changing tastes or other regulations) is straightforward.

Using data from 2000 to 2012, the authors find that cheeseburger bills did not change the average number of McDonald’s outlets per state (it held constant at about 270). Yet they did result in a significant increase in the number of company-owned McDonald’s restaurants, and a decline in franchises. In cheeseburger-bill states, the prospect of hefty settlements faded. With a corresponding rise in expected profitability, the authors suppose, McDonald’s reacquired stores from franchisees.

Cheeseburger bills seem to have had positive effects on public health, too. In states that have them, obese people were 6.1% more likely to claim that they were trying to lose weight. They also said that they ate nearly 10% more fruit and vegetables than their counterparts elsewhere. These figures are self-reported, but they suggest that the bills can help bottom lines and waistlines.

* “Do ‘cheeseburger bills’ work? Effects of tort reform for fast food”, by Christopher Carpenter and Sebastian Tello-Trillo, NBER working paper.

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