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Smoking in Restaurants: A Reply to David Henderson


  • Benjamin C. Alamar
  • Stanton A. Glantz


“Smoking in Restaurants: Who Best Sets the House Rules?†by David Henderson, Econ Journal Watch 4(3), is a comment on our paper “Smokefree Laws Increase Restaurant Values,†Contemporary Economic Policy 22(4). Henderson asserts that restaurant owners can internalize all of the costs related to second hand smoke. There is, however, no mechanism by which a restaurant owner can compensate a patron for any health costs related to second hand smoke, therefore it is not possible for the owner to have completely internalized the costs of the externality imposed by the smoker. Henderson also notes that because we use a ratio (the dependent variable was the Price to Sales ratio (P/S)), the positive effect we found could just as easily come from a reduction in sales as an increase in price. This statement demonstrates a lack of knowledge of the previous literature that has repeatedly found either no or positive effect on sales associated with smokefree laws.

Suggested Citation

  • Benjamin C. Alamar & Stanton A. Glantz, 2007. "Smoking in Restaurants: A Reply to David Henderson," Econ Journal Watch, Econ Journal Watch, vol. 4(3), pages 292-295, September.
  • Handle: RePEc:ejw:journl:v:4:y:2007:i:3:p:292-295

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    Cited by:

    1. David R. Henderson, 2008. "Smoking in Restaurants: Rejoinder to Alamar and Glantz," Econ Journal Watch, Econ Journal Watch, vol. 5(2), pages 163-168, May.
    2. Benjamin C. Alamar & Stanton A. Glantz, 2008. "Externalities in the Workplace: A Response to a Rejoinder to a Response to a Response to a Paper," Econ Journal Watch, Econ Journal Watch, vol. 5(2), pages 169-173, May.
    3. Annette Hofmann & Martin Nell, 2012. "Smoking bans and the secondhand smoking problem: an economic analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(3), pages 227-236, June.
    4. Michael L. Marlow, 2008. "Honestly, Who Else Would Fund Such Research? Reflections of a Non-Smoking Scholar," Econ Journal Watch, Econ Journal Watch, vol. 5(2), pages 240-268, May.

    More about this item


    Smoking; smoke-free; externalities; restaurants;

    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 - - - Energy, Environmental, Health, and Safety Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation


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