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

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.