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The influence of a smoking ban on the profitability of Belgian restaurants

Author

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  • S. DE SCHOENMAKER
  • P. VAN CAUWENBERGE
  • H. VANDER BAUWHEDE

Abstract

Objective: To examine whether the nationwide smoking ban, imposed in 2007, had an impact on the profitability of Belgian restaurants. Data and methods: Objective financial reporting data on 1,613 restaurants were analysed with return on assets as the outcome measure. The data were collected from the Belfirst database and cover the period 2004-2009. To assess the impact of the smoking ban, a differences-indifferences estimation method was used, with bars serving as the control group. The regression model was estimated, while controlling for firm-specific characteristics and unobserved firmlevel heterogeneity. Results: The variable of interest is the interaction between the smoking ban dummy and the dummy for the treatment group. The coefficient of this variable is insignificant. Conclusion: The adoption of the nationwide smoking ban did not affect the profitability of Belgian restaurants.

Suggested Citation

  • S. De Schoenmaker & P. Van Cauwenberge & H. Vander Bauwhede, 2012. "The influence of a smoking ban on the profitability of Belgian restaurants," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/791, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:12/791
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