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

Author

Listed:
  • 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)

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.

Suggested Citation

  • David W. Cowling & Philip Bond, 2005. "Smoke-free laws and bar revenues in California - the last call," Health Economics, John Wiley & Sons, Ltd., vol. 14(12), pages 1273-1281.
  • Handle: RePEc:wly:hlthec:v:14:y:2005:i:12:p:1273-1281
    DOI: 10.1002/hec.1016
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    File URL: http://hdl.handle.net/10.1002/hec.1016
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    1. repec:aph:ajpbhl:2001:91:2:245-252_1 is not listed on IDEAS
    2. repec:aph:ajpbhl:2001:91:4:598-603_1 is not listed on IDEAS
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    Cited by:

    1. Peter Schulz & Uwe Hartung & Maddalena Fiordelli, 2012. "Effect of smoke-free legislation on Ticino gastronomy revenue," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 57(6), pages 861-866, December.
    2. 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.
    3. 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.
    4. Aycan Koksal & Michael K. Wohlgenant, 2016. "How do smoking bans in restaurants affect restaurant and at-home alcohol consumption?," Empirical Economics, Springer, vol. 50(4), pages 1193-1213, June.
    5. repec:zbw:rwirep:0172 is not listed on IDEAS
    6. Kvasnicka, Michael & Tauchmann, Harald, 2012. "Much ado about nothing? Smoking bans and Germany's hospitality industry," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 4539-4551.
    7. 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.
    8. 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.
    9. Jerome Adda & Samuel Berlinski & V. Bhaskar & Stephen Machin, 2009. "Market regulation and firm performance: the case of smoking bans in the UK," IFS Working Papers W09/13, Institute for Fiscal Studies.
    10. Kim, Dohyung & Yörük, Barış K., 2015. "The impact of restaurant smoking bans on dining out expenditures: Evidence from panel data," Journal of Urban Economics, Elsevier, vol. 88(C), pages 38-49.
    11. Robert K. Fleck & F. Andrew Hanssen, 2008. "Why Understanding Smoking Bans Is Important For Estimating Their Effects: California'S Restaurant Smoking Bans And Restaurant Sales," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 60-76, January.

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