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NYC restaurant grades may be inflated: Study

Dinner service at Fogo De Chao
Mineralblu Photography

Foodies take heed!

Before jumping on those discounted pre-fixe menus during New York City's popular Restaurant Week, new data suggests some restaurants may owe their fortunes to being graded on the curve.

NYC's official guide describes the restaurant week as "a semiannual promotion that celebrates fine dining at an affordable price in New York City." The promotion runs from Monday, January 18 through Friday, February 5.

The New York City Department of Health and Hygiene (DOH) conducts an annual inspection of roughly 24,000 restaurants, bars and cafeterias on food safety factors, assigning letter grades based on a score aggregated from health code violations. The lower the number of violations, the lower the score and better the grade: An "A" represents the best, followed by "B," "C" and "D."

Using NYC OpenData that includes data on restaurant inspection, a group of graduate students at the New York University's Stern School of Business has found that the Department of Health prefers to grade restaurants at the low end of a higher grade, rather than at the high end of a lower grade. In some places, and certainly some institutions of higher learning, that can be construed as a form of grade inflation.

"We were interested in what big data could tell us about the relationship between location, weather and DOH restaurant ratings," said Vincent DiMascio, whose team gathered data and conducted analysis on the topic.

"While there was no significant relationship with the weather, the results suggest that health inspectors are more likely to skew their scores towards an A- rather than a B+," he added. "And that the non-food and non-vermin violations are the most frequently cited."

City practices do allow restaurants who don't receive an "A" grade on their initial inspection to request a re-inspection before a final grade is given. This means that an initial "B" grade can correct enough deficiencies to earn an "A".

DOH's grading helps identify restaurants that largely abide by city's health codes, to solely rely on a letter grade to gauge a restaurant's hygienic quality can sometimes be misleading, according to the NYU study.

In a statement provided to CNBC, DOH defended its practices.

"Restaurants are earning better grades because they are cleaner than ever before, earning fewer violations for pests, food out of temperature and other food safety measures," the agency said. "There is no grade inflation. Across the board restaurants have improved across all grade categories since the launch of the restaurant grading system."

That said, the NYU study's findings were broadly consistent with another independent study conducted on the topic that suggested the city's grading policy might be too lenient.

In the last two years there were 114,957 different health inspections just in the borough of Manhattan alone. Over 95 percent of those inspections resulted in some form of code violation, but a mere 2 percent of violations led to the shutting of an establishment by DOH. Meanwhile, a little over 1 percent had no violation recorded at the time.

NYU's research also led to another interesting conclusion: Restaurants in the Upper East Side—despite being one of the most affluent zip codes in New York City, had the high percentage of rodents and roaches during the study period. On theory attributes the pest problem to 2nd Avenue subway construction, which some think drives rodents from underground nests to warm kitchens on the street level.

Despite some disturbing and unusual findings, DiMascio has words of encouragement for restaurant goers.

"New Yorkers have a rich culture of dining out and some of the best restaurants in the world can be found in this city," he said. "Regardless of the weather people should take advantage of restaurant week—preferably in a restaurant that isn't in a close proximity to a construction site."