Abstract

Information disclosures often “nudge” consumers to make better choices—for example, when manufacturers include nutrition labels on food packaging or fuel economy standards on cars. Yet having to disclose can have a nudge effect on the disclosing entity, too—for example, by incentivizing a manufacturer to make healthier food or more fuel-efficient cars. Recently, regulators around the world have begun to use information disclosures to improve racial and gender equality—for example, by requiring certain businesses to disclose information on things like harassment complaints, board diversity, and employee pay. But are such disclosure efforts worth their costs? And what would indicate that policymakers should continue or expand similar measures?

This Article addresses how to evaluate what it refers to as “equality disclosures,” highlighting the need to account for the often overlooked public enforcement value of the nudge on the disclosing entity. When measuring disclosure as a behaviorally informed intervention, we tend to focus on the welfare effects on the consumer of the information—the now-informed person who chooses (or declines) to eat the food or purchase the car. But disclosure requirements also affect the behavior of the producer of the information, thus serving an important enforcement role in the administrative state. Any assessment of the value of equality disclosures must include the public benefit gained when the act of having to disclose nudges disclosing entities toward self-monitoring and legal compliance.

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