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Smoke-free laws and bar revenues in California - the last call

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Author Info

  • David W. Cowling

    (Tobacco Control Section, California Department of Health Services, USA)

  • Philip Bond

    (University of Pennsylvania, Wharton Finance Department, Steinberg Hall-Dietrich Hall, USA)

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    Abstract

    California was the first state to implement smoke-free restaurant and bar laws, in 1995 and 1998, respectively. We analyze how these laws affected the distribution of revenues between bars and restaurants. Critics of smoke-free bar laws have often claimed that a prohibition on smoking reduces bar revenues. Similar claims are made for the effects of smoke-free restaurant laws. Such claims implicitly assume that a smoke-free law reduces expenditures by smokers by more than it increases expenditures by non-smokers. Using tax revenue data from 1990 to 2002, our analysis suggests that the actual effect is just the opposite: the 1995 smoke-free restaurant law is associated with an increase in restaurant revenues, while the 1998 smoke-free bar law is associated with an increase in bar revenues. Copyright © 2005 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.1016
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 14 (2005)
    Issue (Month): 12 ()
    Pages: 1273-1281

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    Handle: RePEc:wly:hlthec:v:14:y:2005:i:12:p:1273-1281

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    Cited by:
    1. Jerome Adda & Samuel Berlinski & V. Bhaskar & Steve Machin, 2009. "Market regulation and firm performance: the case of smoking bans in the UK," IFS Working Papers W09/13, Institute for Fiscal Studies.
    2. Gabriel M. Ahlfeldt & Wolfgang Maennig, 2010. "Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(5), pages 506-521, October.
    3. Silvia Tiezzi, 2009. "The Economic Impact of Clean Indoor Air Laws: A Review of Alternative Approaches and of Empirical findings," Department of Economics University of Siena 570, Department of Economics, University of Siena.
    4. Michael Kvasnicka & Harald Tauchmann, 2012. "Much ado about nothing? Smoking bans and Germany's hospitality industry," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4539-4551, December.
    5. Koksal, Aycan & Wohlgenant, Michael, 2013. "Interdependence of Tobacco and Alcohol Consumption: A Natural Experiment Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150459, Agricultural and Applied Economics Association.

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