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Smoking in Restaurants:Who Best to Set the House Rules?

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Author Info
Henderson David R. ()
Abstract

Alamar 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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File URL: http://www.econjournalwatch.org/pdf/HendersonCommentSeptember2007.pdf
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Publisher Info
Article provided by Atlas Economic Research Foundation in its journal Econ Journal Watch.

Volume (Year): 4 (2007)
Issue (Month): 3 (September)
Pages: 284-291
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ejw:volone:20073-45

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Web page: http://www.econjournalwatch.org/main/index.php

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Related research
Keywords: Smoking; smoke-free; externalities; restaurants.;

Find related papers by JEL classification:
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: 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

Cited by:
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  1. Alan Martina, 2007. "A Class of Poverty Traps: A Theory and Empirical Tests," ANUCBE School of Economics Working Papers 2007-482, Australian National University, College of Business and Economics, School of Economics. [Downloadable!]
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This page was last updated on 2009-11-20.

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