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The economic impact of a smoking ban in Columbia, Missouri: an analysis of sales tax data for the first year

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  • Michael R. Pakko

Abstract

In January 2007, an ordinance took effect in Columbia, Missouri, banning smoking in all bars, restaurants, and workplaces. This paper analyzes data for sales tax collections at eating and drinking establishments from January 2001 through December 2007, including the first twelve months of the smoking ban. The analysis accounts for trends, seasonality, general business conditions, and weather. The findings suggest that the smoking ban has been associated with statistically significant losses in sales tax revenues at Columbia's bars and restaurants, with an average decline of approximately 3 to 4 percent. Businesses that serve only food show no statistically significant effects of the smoking ban. Those that serve food and alcohol, or alcohol only, show significant losses with estimates in the range of 6 to 11 percent (with the larger losses associated with bars). Some individual businesses within each category may have been unaffected, whereas others are likely to have incurred much greater losses.

Suggested Citation

  • Michael R. Pakko, 2008. "The economic impact of a smoking ban in Columbia, Missouri: an analysis of sales tax data for the first year," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Oct, pages 30-40.
    • Handle: RePEc:fip:fedlrd:y:2008:i:oct:p:30-40:n:v.4no.1
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    References listed on IDEAS

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    1. Michael Pakko, 2008. "No smoking at the slot machines: the effect of a smoke-free law on Delaware gaming revenues," Applied Economics, Taylor & Francis Journals, vol. 40(14), pages 1769-1774.
    2. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
    3. Michael R. Pakko, 2008. "Clearing the haze? new evidence on the economic impact of smoking bans," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jan, pages 10-11.
    4. Adams Scott & Cotti Chad D., 2007. "The Effect of Smoking Bans on Bars and Restaurants: An Analysis of Changes in Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-34, February.
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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. Laura Cornelsen & Charles Normand, 2012. "Impact of the smoking ban on the volume of bar sales in Ireland – evidence from time series analysis," Health Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 551-561, May.
    3. Thomas A. Garrett & Michael R. Pakko, 2009. "Casino revenue and the Illinois smoking ban," Working Papers 2009-027, Federal Reserve Bank of St. Louis.

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