IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/doi10.1086-663349.html
   My bibliography  Save this article

Market Regulation and Firm Performance: The Case of Smoking Bans in the United Kingdom

Author

Listed:
  • Jérôme Adda
  • Samuel Berlinski
  • Stephen Machin

Abstract

This paper analyzes the effects on firms of a ban on smoking in public places. Our empirical strategy relies on comparing outcomes in Scotland before and after the Scottish smoking ban (introduced in March 2006) with those in northern England, where such a ban was not in place. Our analysis of survey data collected from public houses finds that the Scottish smoking ban reduced pub sales with no concomitant effect on prices. An event study analysis of the stock market performance of pub-holding companies corroborates the negative effect of the smoking ban on firm performance.

Suggested Citation

  • Jérôme Adda & Samuel Berlinski & Stephen Machin, 2012. "Market Regulation and Firm Performance: The Case of Smoking Bans in the United Kingdom," Journal of Law and Economics, University of Chicago Press, vol. 55(2), pages 365-391.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/663349
    DOI: 10.1086/663349
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/663349
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/663349
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/663349?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kanaka D. Shetty & Thomas DeLeire & Chapin White & Jayanta Bhattacharya, 2011. "Changes in U.S. hospitalization and mortality rates following smoking bans," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(1), pages 6-28, December.
    2. Tomlin Jonathan T., 2009. "The Impact of Smoking Bans on the Hospitality Industry: New Evidence from Stock Market Returns," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-19, March.
    3. Jérôme Adda & Francesca Cornaglia, 2010. "The Effect of Bans and Taxes on Passive Smoking," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 1-32, January.
    4. David Card & Alan Krueger, 1994. "The Effect of the Minimum Wage on Shareholder Wealth," Working Papers 716, Princeton University, Department of Economics, Industrial Relations Section..
    5. Benjamin C. Alamar & Stanton A. Glantz, 2004. "Smoke‐free Ordinances Increase Restaurant Profit and Value," Contemporary Economic Policy, Western Economic Association International, vol. 22(4), pages 520-525, October.
    6. David Card & Alan B. Krueger, 1994. "The Effect of the Minimum Wage on Shareholder Wealth," Working Papers 716, Princeton University, Department of Economics, Industrial Relations Section..
    7. Alamar, B C & Glantz, Stanton A. Ph.D., 2004. "Smoke-free ordinances increase restaurant profit and value," University of California at San Francisco, Center for Tobacco Control Research and Education qt91w950j4, Center for Tobacco Control Research and Education, UC San Francisco.
    8. Schwert, G William, 1981. "Using Financial Data to Measure Effects of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 24(1), pages 121-158, April.
    9. Karafiath, Imre, 1988. "Using Dummy Variables in the Event Methodology," The Financial Review, Eastern Finance Association, vol. 23(3), pages 351-357, August.
    10. Jérôme Adda & Francesca Cornaglia, 2010. "Passive smoking: the effect of bans and taxes," CentrePiece - The magazine for economic performance 315, Centre for Economic Performance, LSE.
    11. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrew M. Jones & Audrey Laporte & Nigel Rice & Eugenio Zucchelli, 2015. "Do Public Smoking Bans have an Impact on Active Smoking? Evidence from the UK," Health Economics, John Wiley & Sons, Ltd., vol. 24(2), pages 175-192, February.
    2. Nikaj, Silda & Miller, Joshua J. & Tauras, John A., 2017. "Exploring heterogeneity in the impact of smoking bans among early and late adopters," Economics Letters, Elsevier, vol. 155(C), pages 164-167.
    3. Renaud Foucart, 2017. "Group Consumption and Product Diversity: The Case of Smoking Bans," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 559-584, September.
    4. 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.
    5. Green, Colin P. & Heywood, John. S. & Navarro, Maria, 2014. "Did liberalising bar hours decrease traffic accidents?," Journal of Health Economics, Elsevier, vol. 35(C), pages 189-198.
    6. Miaoqing Yang & Eugenio Zucchelli, 2018. "The impact of public smoking bans on well‐being externalities: Evidence from a policy experiment," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(3), pages 224-247, July.
    7. Tamechika, Hanae, 2020. "Effects of Environment-Related Stimulus Policies: An Event Study Approach," 2020 Conference (64th), February 12-14, 2020, Perth, Western Australia 305244, Australian Agricultural and Resource Economics Society.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Kvasnicka, Michael & Tauchmann, Harald, 2012. "Much ado about nothing? Smoking bans and Germany's hospitality industry," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 44(35), pages 4539-4551.
    3. 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.
    4. Stefan Boes & Joachim Marti & Johanna Catherine Maclean, 2015. "The Impact of Smoking Bans on Smoking and Consumer Behavior: Quasi‐Experimental Evidence from Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1502-1516, November.
    5. Scott Adams & Chad D. Cotti & Daniel M. Fuhrmann, 2013. "Smokeless Tobacco Use Following Smoking Bans in Bars," Southern Economic Journal, John Wiley & Sons, vol. 80(1), pages 147-161, July.
    6. Bharadwaj, Prashant & Johnsen, Julian V. & Løken, Katrine V., 2014. "Smoking bans, maternal smoking and birth outcomes," Journal of Public Economics, Elsevier, vol. 115(C), pages 72-93.
    7. Daniel Kuehnle & Christoph Wunder, 2017. "The Effects of Smoking Bans on Self‐Assessed Health: Evidence from Germany," Health Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 321-337, March.
    8. Tami Gurley-Calvez & George W. Hammond & Randall A. Childs, 2014. "Labor Market Impacts Of Smoking Regulations On The Restaurant Industry," Contemporary Economic Policy, Western Economic Association International, vol. 32(4), pages 681-694, October.
    9. Michael Kvasnicka & Thomas Siedler & Nicolas R. Ziebarth, 2018. "The health effects of smoking bans: Evidence from German hospitalization data," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1738-1753, November.
    10. Tomlin Jonathan T., 2009. "The Impact of Smoking Bans on the Hospitality Industry: New Evidence from Stock Market Returns," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-19, March.
    11. 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.
    12. Odermatt, Reto & Stutzer, Alois, 2015. "Smoking bans, cigarette prices and life satisfaction," Journal of Health Economics, Elsevier, vol. 44(C), pages 176-194.
    13. Ljudevit Pranic & Snjezana Pivac & Anela Colak, 2013. "Cafe Owners Attitudes Before The Enactment Of A Smoke-Free Legislation In Transition Countries," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 22(1), pages 57-78, june.
    14. 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.
    15. Odermatt, Reto & Stutzer, Alois, 2018. "Tobacco Control Policies and Smoking Behavior in Europe: More Than Trends?," Working papers 2018/24, Faculty of Business and Economics - University of Basel.
    16. Wildman, John & Hollingsworth, Bruce, 2013. "Public smoking bans and self-assessed health: Evidence from Great Britain," Economics Letters, Elsevier, vol. 118(1), pages 209-212.
    17. 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.
    18. Sara Markowitz, 2014. "Where There'S Smoking, There'S Fire: The Effects Of Smoking Policies On The Incidence Of Fires In The Usa," Health Economics, John Wiley & Sons, Ltd., vol. 23(11), pages 1353-1373, November.
    19. Renaud Foucart, 2017. "Group Consumption and Product Diversity: The Case of Smoking Bans," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 559-584, September.
    20. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:doi:10.1086/663349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.