Money,Banking and Fanancial MarketsIn some cities, news papers publish a weekly list of restaurant that have been cited for health code violations by local health inspected. What information...
In some cities, news papers publish a weekly list of restaurant that have been cited for health code violations by local health inspected. What information problem is this feature designed to solved, and how?
Another possible information problem addressed by this feature of reporting is that by which idiosyncratic information is waylaid by hierarchical powers. In other words, restaurant goers are not familiar with the idiosyncratic knowledge of such things as the specifications regulating parts chlorine to parts water for restaurant kitchen cleaning, but this information relates to important health consequences when specifications are violated. Publication of restaurant inspection reports side steps the hierarchy that might have reason to withhold such important inspection information.
When both parties (the restaurants and the customers) have the same information, everyone benefits. These restaurants are now under the threat of the Health Inspectors, but also the negative publicity of the newspaper report. It is all the more important for restaurants to fulfill the health codes to keep their customers safe and satisfied, but when they do this, customers are all the more comfortable dining out and will likely eat out more in the places that have positive ratings and/or no citations of note.
With more information, a consumer can make better choices. An informed consumer is a repeat consumer, so it is in the interests of the honest and clean restaurants to get their information out. If you don't know that Joe's Diner down the street is A+ rated by the BHHS, you will bypass it for a farther destination; Joe wants you to come to his diner, so he likes the publicity. Conversely, if Joe's Diner is filthy, the bad publicity will cause his clients to disappear until he cleans up his act.
The publication of such information helps increase consumer awareness and choice of the restaurants available. We can see this as two groups working together to help broadcast information that it is important to the public. It would be so easy for health inspectors to perform their checks but for nobody to realise their conclusions. Newspapers therefore help to counteract this by broadcasting their findings to the public.
Post 2 makes a key. If the newspaper does not publish this information, then there is a lack of information for customers. Hence, one side would know, but the other side would not know. The newspaper seeks to create parity in knowledge. In addition, from a practical point of view, this will make public knowledge public and cause these restaurants to do something about the violations.
I would say that this information is meant to inform the customers of important findings and possible violations that customers have a right to know about. Anything regarding 'health' and sanitation issues should be carefully regulated and communicated with to the public so that customers can be informed and restaurants can make the improvements that they need to make.
I would say that this is meant to solve the problem of information asymmetry. This is the problem that occurs when one side in a transaction has more information than the other side. If newspapers do not publish these lists, the consumers have no way to get as much information as producers have about restaurants and potential health hazards.
I head a news story about New York City's program recently. Basically, it said that restaurants complained about the constant inspections, but that restaurant visits actually had gone up 15% since the program started, and the majority of restaurants earned A ratings.