THE ECONOMIC IMPACT OF 100% SMOKE-FREE ORDINANCES
ANR Study May 6, 2002
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Fort Wayne, IN: Conservative Hudson Institute
Fellow, William Styring, investigated the impact of a 1998 smoking
ban on restaurant revenues in Fort Wayne. Sales tax data was
collected between 1987 (twelve years before the ordinance was
enacted) and 2000 (two years after the ordinance was enacted).
No statistically significant variation in revenues was found.
(Styring, "A Study of the Fort Wayne (IN) Restaurant Smoking
Ban: Has it impacted the Restaurant Business?" May 2001)
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British Columbia, Canada: On January 1, 2000,
the Worker's compensation Board (WCB) of British Columbia amended
its workplace smoking laws to include the hospitality industry.
The following March, the amendment was overturned in court pending
further public consultations. A study conducted by Pacific Analytics
Inc analyzed both the real (two month) and potential economic
impact of the amendment at the request of the WCB. Researchers
concluded that the amendment would have had no long-term impact
on employment or restaurant sales. A new amendment prohibiting
smoking in all hospitality and entertainment facilities went
into effect in April 2002. ("The Economic Impacts of the
Proposed Amendment to the ETS Regulation." Prepared for
the Workers Compensation Board of British Columbia by Pacific
Analytics Inc. February, 2001.)
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Massachusetts: A systematic statewide comparison
of 239 communities in Massachusetts revealed that local smoke-free
ordinances do not harm businesses. Taxable meals receipts data
was collected for over 1,000 restaurants between 1992 and 1999.
Contrary to restaurateur predications, researchers found that
restaurant sales in towns without such restrictions. Included
in the study was an analysis of the effect of comprehensive
ordinances on communities bordering towns without similar smoking
restrictions. The data revealed that this factor "failed
to have a statistically significant effect on meals receipts."
(Bartosch, William, and Pope, Gregory, (2002), The Economic
Effect of Restaurant Smoking Restrictions on Restaurant Business
in Massachusetts 1192-1998: Final Report, Center for Health
Economics Research, submitted to Massachusetts Department of
Public Health, November 27, 2000.)
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Texas: Clean indoor air ordinances were passed
in Arlington, Austin, Plano, and Wichita Falls between July
1994 and March 1996. Researchers evaluated the effect of these
ordinances on restaurant sales using restaurant and retail tax
data. Information was collected from the first quarter of 1987
through the last quarter of 1999. Despite variations in the
municipalities' geographic, demographic, and economic composition,
no detrimental effect on restaurant sales was found to have
resulted from the ordinances in any of the four cities studied.
(Hayslett, and Huang, "Impact of Clean Indoor Air Ordinances
on Restaurant Revenues in Four Texas Cities" March 21,
2000.)
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Boulder, Colorado: According to GASP (Group
to Alleviate Smoking Pollution) of Colorado, sales tax revenues
continued to grow in Boulder after the passage of the smokefree
restaurant ordinance in 1995. Revenues from January through
October of 1997 were up 3.14%, 1998 revenues were up 4.83%,
and 1999 revenues were up 4.31%. The Boulder city fiancé
department referred to the 1999 restaurant sales as a positive
"strength." (Boulder's Smoke-Free Ordinance Makes
Good Cents for Restaurants and Bars." GASP of Colorado
(Group to Alleviate Smoking Pollution, 2000.)
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Dane County, Wisconsin: In 1992, the city of
Madison and several surrounding towns in Dane County passed
smoke-free restaurant ordinances. A report on the impact of
these laws found that between 1992 and 1997, per capita restaurant
expenditures rose at a higher rate within the county than in
the rest of the state. Meanwhile, employment in restaurants
grew faster than in any other Madison industry. Furthermore,
the number of voluntary smokefree restaurants in Dane county
areas not covered by the ban grew from 4 in 1993 to 89 in 1997.
(Dresser, "Clearing the Air: The Effect of Smoke free Ordinances
on Restaurant Revenues in Dane County." Tobacco-Free Wisconsin
Coalition. January 1999.)
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New York City: A study published in the Journal
of Public Health Management and Practice, reported that hotels
and restaurants in New York City experienced increases in taxable
sales revenue after the 1995 smokefree air act took effect.
Furthermore, the sales at eating and drinking establishments
in NYC went up as a percentage of both total sales in the city
and total restaurants sales from New York State after the law
was implemented. Researchers stated that, "Based on these
data, it can be concluded that the smoke-free law did not harm
the restaurant industry in New York City." (Hyland, Cummings,
and Nauenberg, "Analysis of Taxable Sales Receipts: Was
New York City's Smoke-Free Air Act Bad for Restaurant Business?"
Journal of Public Health Management and Practice, January 1999.)
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Corvallis, Oregon: A July 1998 smoking ban in
Corvallis bars did not harm business, concluded a study conducted
by the Pacific Research Institute in Eugene. Sales data was
collected from September 1997 through September 1999 and compared
to data collected in nearby communities where similar smokefree
laws were not in place. Researcher concluded that smokers did
not abandon Corvallis bars and restaurants, and revenues from
the non-smoking majority replaced any loss of business from
smokers. Furthermore, Corvallis showed no decline in malt beverage
sales relative to surrounding communities. (Dresser, Boles,
Lichtenstein and Strycker, "Multiple Impacts of a Bar Smoking
Prohibition Ordinance in Corvallis, Oregon." Pacific Research
Institute, Eugene Oregon. n.d.)
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Chapel Hill, NC: Researchers at UNC-Chapel Hill
examined restaurant sales data between 1990 and 1997 in ten
counties; five with comprehensive smoking ordinances and five
similarly situated counties with weak or no smoking ordinances.
No differences were found in restaurant sales between the two
groups. (Goldstein and Sobel, "Environmental Tobacco Smoke
Regulations Have Not Hurt Restaurant Sales in North Carolina,
"North Carolina Medical Journal, 59(f\5); 284-288, September/October
1998.
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California and Colorado: In a follow-up to a
landmark 1994 study, University of California researchers found
that 100% smokefree restaurant and bar ordinances do not adversely
impact revenues. Researchers analyzed sales tax data, comparing
restaurant sales in 15 cities to total retail sales in the same
cities, and restaurant sales in 15 comparison cities. The researchers
also examined five cities and two counties with smokefree bar
ordinances. (Glantz and Smith, "The Effect of Ordinances
Requiring Smoke-Free Restaurants and Bars Revenues: A Follow-up,
"American Journal of Public Health, 87(10): 1687-1693,
October 1997.)
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West Lake Hills, TX: Researchers at the Center
for disease control and Prevention used sales tax data to
analyze the impact of a 100% smokefree ordinance on restaurant
sales in West Lake Hills. Data was collected for a 17-month
period preceding the enactment of the ordinance and for a
19-month period following the enactment. Multiple linear regression
techniques were used to account for seasonal variations and
temporal economic trends. The study concluded, "The total
sales of the restaurants did not decrease after implementation
of the ordinance." (CDCP, "Assessment of the Impact
of a 100% Smoke-Free Ordinance on Restaurant Sales "Morbidity
and Mortality Weekly Report, 44:370-372, 1995.)
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Beverly Hills and Bellflower, CA: The California
cities of Beverly Hills and Bellflower repealed their smokefree
restaurant ordinances following opposition organized by the
tobacco industry. Studies have since shown that, contrary to
tobacco industry claims, there was no detectable drop in restaurant
sales during the time the ordinances were in effect, nor was
there an increase in restaurant sales following reversal of
the 100% smokefree ordinances. (Hinderliter, de Llamas and Associates,
Glendora, CA, November 8, 1991; Glantz and Smith, "The
Effect of Ordinances Requiring Smokefree Restaurants on Restaurant
Sales, "American Journal of Public Health 1994; 84:1081-1085;
and "The 30 Percent Myth,: Consumer Reports, May 1994;p.
320.)
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