Smoking Ban Economic Studies

“Using county level data on employment from across the US, we find that communities where smoking is banned experience reductions in bar employment compared with counties that allow smoking.”

“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 3.5 to 4 percent. Those that serve food and alcohol, or alcohol only, show significant losses with estimates in the range of 6.5 to 11 percent.”

“These losses in Dallas represent a significant decrease and should be of concern for Dallas policy makers as they demonstrate the city is becoming less of a destination of choice for hospitality venues. They also clearly demonstrate the new ordinance is not drawing people into Dallas bars and restaurants as proponents of the ordinance forecasted.”

“Revenues are found to have declined significantly at each of the three facilities, with relative magnitudes of losses corresponding to the availability of alternative gaming venues in the region.”

“I find negative abnormal stock returns to portfolios of the hospitality industry firms examined upon the announcement of a proposed smoking ban. These results support the conclusion that a smoking ban lowered the aggregate market value of these firms.”

“Estimates suggest that revenue and admissions at Illinois casinos declined by more than 20 percent ($400 million) and 12 percent, respectively. Calculations reveal that casino tax revenue to state and local governments declined by approximately $200 million.”

“Non-smoking ordinances were found to have a statistically significant impact on the sales and profits of individual restaurants in certain cases. Most of the significant effects regarding specific ordinance types enacted at different times were negative.

“Annual sales declines were estimated at 36 percent at restaurants where these bans were enacted four or more years earlier.

“In cases where significant declines in sales were estimated, gross profit tended to decline by a somewhat greater percentage.

“Specifically, the following statewide economic losses have occurred in New York’s bar and tavern industry as a direct result of the statewide smoking ban: 2,000 jobs lost (10.7% of actual employment) $28.5 million in wages and salary payments lost, $37 million in gross state product lost.

“In addition, there are indirect losses to other businesses which supply and service the state’s bars and taverns: 650 jobs lost, $21.5 million in labor earnings lost, $34.5 million in gross state product lost.

In summary, the enactment of the New York State smoking ban has had a dramatic negative impact on the bar and tavern business and related businesses. The total economic impact is: 2650 jobs lost, $50 million in worker earnings lost, $71.5 million in gross state product lost.”