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Smoke‐free laws and bar revenues in California – the last call

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  • David W. Cowling
  • Philip Bond

Abstract

California was the first state to implement smoke‐free restaurant and bar laws, in 1995 and 1998, respectively. We analyze how these laws affected the distribution of revenues between bars and restaurants. Critics of smoke‐free bar laws have often claimed that a prohibition on smoking reduces bar revenues. Similar claims are made for the effects of smoke‐free restaurant laws. Such claims implicitly assume that a smoke‐free law reduces expenditures by smokers by more than it increases expenditures by non‐smokers. Using tax revenue data from 1990 to 2002, our analysis suggests that the actual effect is just the opposite: the 1995 smoke‐free restaurant law is associated with an increase in restaurant revenues, while the 1998 smoke‐free bar law is associated with an increase in bar revenues. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • David W. Cowling & Philip Bond, 2005. "Smoke‐free laws and bar revenues in California – the last call," Health Economics, John Wiley & Sons, Ltd., vol. 14(12), pages 1273-1281, December.
    • Handle: RePEc:wly:hlthec:v:14:y:2005:i:12:p:1273-1281
    DOI: 10.1002/hec.1016
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    References listed on IDEAS

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    1. Magzamen, S. & Glantz, S.A., 2001. "The new battleground: California's experience with smoke-free bars," American Journal of Public Health, American Public Health Association, vol. 91(2), pages 245-252.
    2. Ritch, W.A. & Begay, M.E., 2001. "Strange bedfellows: The history of collaboration between the Massachusetts Restaurant Association and the tobacco industry," American Journal of Public Health, American Public Health Association, vol. 91(4), pages 598-603.
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    Cited by:

    1. Peter Schulz & Uwe Hartung & Maddalena Fiordelli, 2012. "Effect of smoke-free legislation on Ticino gastronomy revenue," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 57(6), pages 861-866, December.
    2. 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.
    3. 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.
    4. Aycan Koksal & Michael K. Wohlgenant, 2016. "How do smoking bans in restaurants affect restaurant and at-home alcohol consumption?," Empirical Economics, Springer, vol. 50(4), pages 1193-1213, June.
    5. repec:zbw:rwirep:0172 is not listed on IDEAS
    6. Ce Shang, 2015. "The Effect of Smoke-Free Air Law in Bars on Smoking Initiation and Relapse among Teenagers and Young Adults," IJERPH, MDPI, vol. 12(1), pages 1-17, January.
    7. 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.
    8. Koksal, Aycan & Wohlgenant, Michael, 2013. "Interdependence of Tobacco and Alcohol Consumption: A Natural Experiment Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150459, Agricultural and Applied Economics Association.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. Pryce, Robert, 2019. "The effect of the United Kingdom smoking ban on alcohol spending: Evidence from the Living Costs and Food Survey," Health Policy, Elsevier, vol. 123(10), pages 936-940.
    14. Robert K. Fleck & F. Andrew Hanssen, 2008. "Why Understanding Smoking Bans Is Important For Estimating Their Effects: California’S Restaurant Smoking Bans And Restaurant Sales," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 60-76, January.

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