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

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Listed:
  • Gabriel Ahlfeldt

    () (Chair for Economic Policy, University of Hamburg)

  • Wolfgang Maennig

    () (Chair for Economic Policy, University of Hamburg)

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 non-smoking ordinances on bar and restaurant revenues in German Federal States. By application of panel spline regression and difference-in-difference strategies, we find negative impact limited to bars in the very short run. If any, there is a positive impact on total expenditures in the long run, indicating that either consumption pattern has not changed at all or that 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, at least in the long run.

Suggested Citation

  • Gabriel Ahlfeldt & Wolfgang Maennig, 2009. "Impact of Non-Smoking Ordinances on Hospitality Revenues: The Case of Germany," Working Papers 026, Chair for Economic Policy, University of Hamburg.
  • Handle: RePEc:hce:wpaper:026
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    File URL: http://www.hced.uni-hamburg.de/WorkingPapers/HCED-026.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. 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.
    2. 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.
    3. Franziska K. Kruse & Wolfgang Maennig, 2017. "The future development of world records," Working Papers 061, Chair for Economic Policy, University of Hamburg.
    4. Verardi Vincenzo & Wagner Joachim, 2011. "Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(4), pages 546-557, August.
    5. repec:zbw:rwirep:0172 is not listed on IDEAS
    6. 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.
    7. Franziska K. Kruse & Wolfgang Maennig, 2018. "Suspension by choice – determinants and asymmetries," Working Papers 064, Chair for Economic Policy, University of Hamburg.
    8. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2017. "Zoning in reunified Berlin," Working Papers 059, Chair for Economic Policy, University of Hamburg.
    9. 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.
    10. Wolfgang Maennig, 2017. "Public Referenda and Public Opinion on Olympic Games," Working Papers 057, Chair for Economic Policy, University of Hamburg.
    11. 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.
    12. Wolfgang Maennig, 2017. "Governance in Sports Organizations," Working Papers 060, Chair for Economic Policy, University of Hamburg.
    13. Fischer, Justina AV & Sousa-Poza, Alfonso, 2010. "The impact of institutions on firms’ rejuvenation policies: Early retirement with severance pay versus simple lay-off. A Cross-European Analysis," MPRA Paper 20343, University Library of Munich, Germany.
    14. Pfeifer, Gregor & Reutter, Mirjam & Strohmaier, Kristina, 2017. "Goodbye smokers' corner: Health effects of school smoking bans," Ruhr Economic Papers 678, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    15. Wolfgang Maennig, 2017. "Major Sports Events: Economic Impact," Working Papers 058, Chair for Economic Policy, University of Hamburg.

    More about this item

    Keywords

    Keywords: Bar Revenues; Non-smoking Ordinances; Restaurant Revenues;

    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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