Smoke‐free Ordinances Increase Restaurant Profit and Value

Abstract

This study estimates the economic value added to a restaurant by a smoke-free policy using regression analysis of the purchase price of restaurants, as a function of the presence of a smokefree law and other control variables. There was a median increase of 16% (interquartile range 11% to 25%) in the sale price of a restaurant in a jurisdiction with a smoke-free law compared to a comparable restaurant in a community without such a law. This result indicates that, contrary to claims made by the tobacco industry and other opponents of smoke-free laws, these laws are associated with an increase in restaurant profitability.

The Austrian Tobacco Act in practice – Analysing the effectiveness of partial smoking bans in Austrian restaurants and bars

“…Many studies have been conducted to examine adherence to total smoking bans in restaurants and bars, but to our knowledge, there are only a few studies analyzing partial bans on smoking and no studies analyzing the specific type of partial ban which is in place in Austria [15,[21][22][23][24].…”

Smoking Restrictions as a Self-Control Mechanism

“…A related finding of the unexpected benefits of smoking restrictions is that ofAlamar and Glantz (2004), who find that smoke-free ordinances actually increase the profitability of restaurants as reflected in the sale price.…”

Smoking bans and the secondhand smoking problem: an economic analysis

“…Decreases ranged from 6 to 47%, depending on the form of analysis. 3 These findings are confirmed by Lightwood and Glantz [24] and Meyers et al [28]. Nevertheless, adverse health effects of secondhand smoke on nonsmokers' health seem, however, complex.…”

“…For instance, Alamar and Glantz [3] find that contrary to claims made by opponents of smoking bans, these laws improve the market value of firms in the hospitality industry.…”