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Smoking Bans in the Presence of Social Interaction

Author

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  • Bauer, Christian
  • Lingens, Jörg

Abstract

This paper analyzes the welfare effects of a public smoking ban in bars. We construct a model that captures crucial features of bar life: competing bars, social interaction, and heterogenous preferences for a smoking ban. Smokers and non-smokers simultaneously choose a bar given their preferences for meeting other people. Bars anticipate the behavior of individuals and choose the smoking regime strategically. Since the (dis)utility from smoking and social interaction are substitutes, the smoking regime is a stronger coordination device if the disutility from smoking is large. If all bars allow smoking in equilibrium, a public smoking ban enhances welfare.

Suggested Citation

  • Bauer, Christian & Lingens, Jörg, 2009. "Smoking Bans in the Presence of Social Interaction," Discussion Papers in Economics 10593, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenec:10593
    as

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    File URL: https://epub.ub.uni-muenchen.de/10593/1/Bans_muc.pdf
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    References listed on IDEAS

    as
    1. Boyes, William J & Marlow, Michael L, 1996. "The Public Demand for Smoking Bans," Public Choice, Springer, vol. 88(1-2), pages 57-67, July.
    2. Poutvaara, Panu & Siemers, Lars-H. R., 2008. "Smoking and social interaction," Journal of Health Economics, Elsevier, vol. 27(6), pages 1503-1515, December.
    3. J. Dunham & ML. Marlow, 2000. "Smoking laws and their differential effects on restaurants, bars, and taverns," Contemporary Economic Policy, Western Economic Association International, vol. 18(3), pages 326-333, July.
    4. Dixit, Avinash & Olson, Mancur, 2000. "Does voluntary participation undermine the Coase Theorem?," Journal of Public Economics, Elsevier, vol. 76(3), pages 309-335, June.
    5. John Dunham & Michael Marlow, 2003. "The economic incidence of smoking laws," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1935-1942.
    6. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    7. Christian Bauer & Jörg Lingens, 2008. "The Strategic Effects of Smoking Bans," Working Papers 055, Bavarian Graduate Program in Economics (BGPE).
    8. John Dunham & Michael L. Marlow, 2004. "The Private Market for Accommodation: Determinants of Smoking Policies in Restaurants and Bars," Eastern Economic Journal, Eastern Economic Association, vol. 30(3), pages 377-391, Summer.
    9. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Smoking Ban; Social Interaction; Coordination Game;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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