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Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany

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  • Ahlfeldt Gabriel M.

    (LSE, Department of Geography & Environment, Houghton Street, London WC2A 2AR, UK)

  • Maennig Wolfgang

    (University of Hamburg, Department of Economics, Chair for Economic Policy, Von-Melle-Park 5, 20146 Hamburg, Germany)

Abstract

Non-smoking ordinances are among the most popular albeit controversial public health-care legislations worldwide. This article provides an empirical assessment of the impact of nonsmoking ordinances on bar and restaurant revenues in German Federal States. By application of a standard panel regression approach and a quasi-experimental research design, we find no compelling evidence for a significant impact of the introduction as well as the weakening of the legislation on revenues of bars and restaurants. Consumption pattern has either not changed at all or any reduction in spending by smokers is compensated for by a corresponding increase by non-smokers. These findings support the German - and similar - non-smoking legislations in the sense that positive externalities resulting from reduced health care cost are likely to outweigh the risk to businesses in the hospitality sector.

Suggested Citation

  • Ahlfeldt Gabriel M. & Maennig Wolfgang, 2010. "Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(5), pages 506-521, October.
    • Handle: RePEc:jns:jbstat:v:230:y:2010:i:5:p:506-521
    DOI: 10.1515/jbnst-2010-0502
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    3. Ahlfeldt Gabriel M. & Maennig Wolfgang, 2010. "Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(5), pages 506-521, October.
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    5. Jaume García-Villar & Ángel López-Nicolás, 2015. "Who is afraid of smoking bans? An evaluation of the effects of the Spanish clean air law on expenditure at hospitality venues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(8), pages 813-834, November.
    6. Gregor Pfeifer & Mirjam Reutter & Kristina Strohmaier, 2020. "Goodbye Smokers’ Corner: Health Effects of School Smoking Bans," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 1068-1104.
    7. Maennig, Wolfgang & Wilhelm, Stefan, 2023. "News and noise in crime politics: The role of announcements and risk attitudes," Economic Modelling, Elsevier, vol. 129(C).
    8. 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.
    9. Steffen Q. Mueller, 2020. "Pre- and within-season attendance forecasting in Major League Baseball: a random forest approach," Applied Economics, Taylor & Francis Journals, vol. 52(41), pages 4512-4528, September.
    10. Wolfgang Maennig & Stefan Wilhelm, 2023. "Crime Prevention Effects of Data Retention Policies," Working Papers 074, Chair for Economic Policy, University of Hamburg.
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    14. Michael Kvasnicka & Harald Tauchmann, 2010. "Much Ado About Nothing? – Smoking Bans and Germany’s Hospitality Industry," Ruhr Economic Papers 0172, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    15. Harald Tauchmann & Silja Lenz & Till Requate & Christoph Schmidt, 2013. "Tobacco and alcohol: complements or substitutes?," Empirical Economics, Springer, vol. 45(1), pages 539-566, August.
    16. Franziska K. Kruse & Wolfgang Maennig, 2019. "Yellow Cards and Suspension by Choice: Determinants and Asymmetries," Working Papers 064, Chair for Economic Policy, University of Hamburg.
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    18. Wolfgang Maennig, 2023. "Centralization in National High-Performance Sports Systems: Reasons, Processes, Dimensions, Characteristics, and Open Questions," Working Papers 073, Chair for Economic Policy, University of Hamburg.
    19. Wolfgang Maennig, 2017. "Public Referenda and Public Opinion on Olympic Games," Working Papers 057, Chair for Economic Policy, University of Hamburg.
    20. Jaume Garcia Villar & Ángel López-Nicolás, 2014. "Who is afraid of the big bad ban? An evaluation of the effects of the Spanish clean air law on expenditure at hospitality venues," Economics Working Papers 1413, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2014.
    21. Wolfgang Maennig, 2017. "Governance in Sports Organizations," Working Papers 060, Chair for Economic Policy, University of Hamburg.
    22. Stefan Boes & Joachim Marti & Johanna Catherine Maclean, 2015. "The Impact of Smoking Bans on Smoking and Consumer Behavior: Quasi‐Experimental Evidence from Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1502-1516, November.

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    More about this item

    Keywords

    Bar and restaurant revenues; non-smoking ordinances; health care legislation;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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