Smoking in Restaurants: Who Best to Set the House Rules?
AbstractAlamar and Glantz interpret smoking in restaurants as a market failure, and they claim that restaurants should welcome government laws that disallow smoking in all restaurants. Contrary to their claims, restaurant owners do have an incentive to eliminate smoking if doing so raises the value of their restaurants. In restaurants, smokers do not impose negative externalities on non-smokers because restaurant owners have well-defined property rights that cause them to internalize the costs and benefits of smoking. Alamar and Glantz claim to show that non-smoking ordinances increase the capital value of restaurants, but their own data do not, in fact, show that. Finally, if it were true that eliminating smoking in restaurants raises the value of restaurants, then the proper approach would be, not to coerce restaurant owners, but to inform them of that fact.
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Bibliographic InfoArticle provided by Econ Journal Watch in its journal Econ Journal Watch.
Volume (Year): 4 (2007)
Issue (Month): 3 (September)
Smoking; smoke-free; externalities; restaurants;
Find related papers by JEL classification:
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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