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Economic Effects Of Smoking Bans On Restaurants And Pubs

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  • Barrie Craven
  • Michael L. Marlow

Abstract

The United Kingdom has recently enacted smoking bans in public places such as restaurants and pubs. Public health advocates argue that bans are necessary because non‐smokers need protection from second‐hand smoke. Advocates also claim that bans do not exert harm on owners because of a vast empirical literature showing that restaurants and bars in the United States never suffer harm following bans. This paper examines whether these claims are true by developing a model within the Coasian framework whereby owners of businesses have incentives to deal with smoking disputes between smokers and non‐smokers. Our model demonstrates that it is incorrect to argue that smoking bans are necessary because the private market has no method of attempting to solve smoking problems. It also predicts that bans exert different effects on different businesses: some will be unaffected while others will experience losses or gains. Our literature review reveals that predictions of differential effects are consistent with the empirical evidence.

Suggested Citation

  • Barrie Craven & Michael L. Marlow, 2008. "Economic Effects Of Smoking Bans On Restaurants And Pubs," Economic Affairs, Wiley Blackwell, vol. 28(4), pages 57-61, December.
  • Handle: RePEc:bla:ecaffa:v:28:y:2008:i:4:p:57-61
    DOI: 10.1111/j.1468-0270.2008.00867.x
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    References listed on IDEAS

    as
    1. Buddelmeyer, Hielke & Wilkins, Roger, 2005. "The Effects of Smoking Ban Regulations on Individual Smoking Rates," IZA Discussion Papers 1737, Institute of Labor Economics (IZA).
    2. Michael L. Marlow, 2008. "Honestly, Who Else Would Fund Such Research? Reflections of a Non-Smoking Scholar," Econ Journal Watch, Econ Journal Watch, vol. 5(2), pages 240-268, May.
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    Cited by:

    1. 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.
    2. Annette Hofmann & Martin Nell, 2012. "Smoking bans and the secondhand smoking problem: an economic analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(3), pages 227-236, June.

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