HomeMy WebLinkAboutCOM 0013.083 2002-2004 ~ Testimony on Bill 260, Draft 2: Relating to Smoking in Certain Places
May 5, 2003 ; =Ltivtt9
Dr. Fred Holschuh ~ , ~~6~03..___
~~~~~C.f:fi Chair, Human Services and Ecatomic Development Committee ~ ~
Gxunty (,;pencil
- Q~s Hawai`iCountyCouncil
~ 25 Aupuni Street
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r'ac: ~xob'~ sz.r-9n~z Dear Chair Holschuh and members of the Human Services and Economic Development
Governing Hoard COn11T1lltee:
./ay Adaddnc'k. Ph. D..Clruu'
('mxer Xrsenrch Center
nJNa,er„ % 'The Coalition for a Tobacco Free Hawaii appreciates this opportunity to testify in strong
Stacy evensc,t rice Cba,r
nauarI A9ed,ea/ support of BiII 260, Draft 2 Relating to Smoking in Certain Places. We thank the
.1'erese dr~sncfanon
or~aniza[ion. Hawaii County Council f' or taking up the important health and safety issue of, and for
,[,nerican cancer sae,em the very strong support of the Council for extending smokefree protection to all
Nanp('i Pacific. Inc
An:,-clean Neorr ~tssoclanun workplaces, including restaurants, bars, nightclubs and bowliing alleys. The Coalition
~f su,ra(~l
strongly supports protection trom second hand smoke for all workers in all workplaces,
A,ner(can Lung Association
°f/laivoi~' and supports the passage of Bill 260 Draft 2 as a tremendous step in accomplishing this.
Cancer 2erearch Censer
ojNamrd r As you know. if passed as currently written, Hawai"i County will have the most
Hawal'i Island ToAacca Free
l'a,.mersh;p ens, Na,varr comprehensive workplace protection from exposure to second hand smoke in the state,
Nawa; r 1,~/mid Tobacco Free and will have one of the best laws in the country.
l'ar[ner.chip- Wesr Hmvm'i
Ha maf'I Srnrc Deparrmenr
of Education
Na,~~a~ ~ scam Deparrn,enl ~ am Clifford Chang Director of the Coalition for a Tobacco Free Hawaii, a statewide
of /(eallh
association of over 140 member organizations, businesses and individuals committed to
1/uu¢,i7 M1ledicn[Ase'ociarinn
Norvarl Medtca~ working together to reduce the negative impact tobacco use has on the health and
Services Associarion
wellbeing of I Iawai`i's resideuis and visitors. The seven fomidim* members of the
Wa,'nnne Coa.vr Comprehensive o
Nealrn r~en,er Coalition are the American Cancer Society Hawai` i Pacific, Inc., American Heart
Tobacco-hiec Kaum
~tmn~ robocco hree Porrnersh!/, Association of Hawai'i_ American Lung Association of Hawaii, Cancer Research Center
individuals of Hawaii, Hawaii State Department of Education, Hawaii State Department of Health,
KIm h1, Sete, Birn(e
npe-r)~ean tee, t'1, a and the tlawai'i Medical Association.
Ken Miller
13e11, Pnrema,,, N.CD
I would like to touch on two issues:
:I nU,orty ,Sogu,bu, [ )
sryf~ ~ I I Iighlight recent information that continue to strengthen the science base regarding
ClffJord C'Irang, h1PN. CHIiS
otr~~ror the health impact of second hand smoke, and
Herh Kuch
('annn,ndcn[ions Coordfnorar 2. Address the concern that restaurants and bars wi II lose business should they go
Ton, don .1yurons Smoke-frec9.
ass Boars ddencac}~ Canrdmamr '
Comm. No.
1'undcrl m parr hT the RBf• TO:
'nherr N'oad Juhnsnn Fwmdar°°~ RCf. DC1Q MAY f1 7~~~
Dc Fred Holschuh; Human Services and F,conomic Development Committee
May 6, 2003; page 2
Regarding the negative health effects of exposure to second hand smoke, you have heard previous testimony
indicating that over 53,000 Americans die each year as a direct result of exposure to second hand smoke- over
50,000 from heart disease and over 3000 from lung cancer. A recent study conducted in New Zealand compared
the blood levels of cotinine of 40 non-smoking hospitality workers working in restawaunts and bars that allow
smoking with 50 people who work in anon-smoking work environment cotinine is a derivative of nicotine
indicates the level of exposure a person has to tobacco smoke. ]n this study saliva samples were taken and a
questionnaire answered before and after each workshift. Many of the non-smoking hospitality workers had cotinine
values as high as 5. I ng/ml (smokers generally have cotinine levels of 7.0 ng/ml and higher). Previous studies have
demonstrated Neat a cotinine level of .4 ng/ml, is associated with a lifetime increased risk dying of lung cancer to 1
in 1000, and for heart disease to I in 100. "fhe study also found the hospitality workers reported more reparatory
infections than those working in anon-smoking environment, and reaffirmed that hospitality workers are exposed
[o levels of second hand smoke of 1 S to 4.4 times greater than Neat of someone living with a smoker.
A recent study conducted in Japan, reported in the July 25, 2001 issue of the Journal of the American Medical
Association (JAMA), examined the coronary flow velocity reserve (CFVR) in 30 healthy Japanese men, I S smokers
and 15 nonsmokers exposed to second hand smoke for 30 minutes in a smoking room in the hospital. This study
found that after only a thirty mimic exposure, the carbon monoxide levels in the nonsmokers increased dramatically,
and that exposure to second hand ,smoke reduced the CFVR in the nonsmokers, sufficient to cause endothelial
dysfunction of the coronary circulation of nonsmokers. Another study examining 5.196 nonsmoking police officers
in Hong Kong exposed to second hand smoke, reported in the August 9, 2000 issue of JAMA. "Chas study found a
clear association and a dose response relationship between second hand exposure at work and respiratory symptoms
in both men and women.
And for a bit of diversity, a recent issue of the American Journal of Epidimiology reported on a study examnng the
effect of second hand smoke on pet cats. Cats living with smokers have more than twice Nie risk of developing
malignant lymphoma than those lip ing with non-smokers, with the risk 3 times greater for those cats living with a
smoker for 5 years or ma~e
Some people have Cestitied questioning whether second hand smoke is a Class A Carcinogen, pointing to Judge
Osteen's ruling overturning the chapters related to second hand smoke as a Class A carcinogen in the 1992 FDA
report. On the Philip Morris's website is the following statement regarding this ruling:
The court - in a decision that EPA is now appealing -rejected the EPA assessment, largely based on findings
that the agency did not adhere to applicable legal requirements and failed to adequately explain its results.
Dr. Fred Holschuh; Human Services and I~;conomic Development Committee
May 6, 2003; page 3
Note that Philip Morris itself did not say the ruling was invalidated because the conclusions were wrong, only that the
FDA did not adhere to legal requirements and did not adequately explain the results. In addition, the ruling did not
overturn any of the FDA conclusions regarding ETS exposure causing other diseases, including heart disease and
asthma, in nonsmokers.
We are pleased that the Hawaii Island and the Kona-Kohala Chambers of Commerce, which represent
approximately 1300 businesses on the Big Island and whose letters of support have been submitted separately, are
in toll support of this law. 'hhe Chambers understand business will not suffer. 1 remind you of the USA'foday
national survey that found that 7U% ofthose surveyed indicated they do not patronize bars specifically because of
exposure to secondhand smoke, ~9% do not patronize nightclubs, and 48% do not patronize restaurants that allow
smoking. As for our Asian visitors, a survey conducted in Hong Kong in September 2002 regarding smoke-free
restaurants found that 772 % of the 1320 people randomly surveyed indicated that their dining out habits would not
change with smoke-free restaurants, 19.7% indicated they would dine out more often, and only 32% indicated they
would dine out less.
In the past several months New York City, followed by the entire state of New York, and the entire state of
Delaware have passed laws for completely smoke-free workplaces, including restaurants, bars and nightclubs. As
of yesterday, Monday, May 5°', all workplaces in Boston became totally smoke-free-including restaurants, bars
and nightclubs. Connecticut is capected to follow with the passage of a similar comprehensive law this week.
Maine, which has had smoke-tree workplaces, including restaurants, since 1999, is expecting to pass a state law
designating bars and nightclubs smoke-flee as well. Passed by a voter initiative, Florida now has a constitutional
amendment that makes workplaces including restaurants, smoke-free.
As of March 3, 2003 over 300 municipalities across the country have enacted smokefree workplace ordinances
including restaurants, over 160 have ordinances that include bar areas within restaurants, and over 90 with
ordinances that include all bars. Not one of these ordinances have been repealed since their passage. One would
think, had restaurants and bars in these areas lost up to 38% of their business as a result of such laws, as the
National Restaurant Association, supported by the tobacco industry continues to claim, that some of these laws
would have been repealed. Instead, more and more locations are going completely smoke-free to protect the health
of all workers, without financial hardship to businesses. It is simply the right thing to do to provide worker
protection from exposure to the harmful substances that make up second hand tobacco smoke. It is time, based on
what is known about the harmful effects of exposure to second hand smoke and the lack of any negative economic
repercussions, to pass a bill that protects all workers on the Big Island
Dr. Fred Holschuh; Human Services and Economic Development Committee
May 6, 2003; page 4
Also attached as part of my testimony is a press release from California after 8 years of smoke-free workplaces
including restaurants, and five years of smoke-free bars. I would like to share a quote from Jim Abrams, the
executive vice president of the California Hotel and Lodging Association. "We in California's lodging industry
were understandably nervous ab~mt the potential detrimental effects of a smoking ban would have on our
businesses. But none of the doomsday predictions happened. In fact, tourism in California increased each year
following passage of AB 13. We can say with certainty to the rest of the country that a workplace smoking ban is
good for the lodging industry."
Michael Casey, President of the Hotel and Restaurant Employees, Local 2, AFL-C[O in San Francisco stated "The
tobacco industry tried to scare our members into thinking their employers would lose business due to the smoking
ban, and that they would lose their jobs. I am proud to say our union members and many employers saw through
those tactics and stood up for the right to a safe and healthy workplace. "Fhe restaurants, bars and hotels where our
members work did not suffer any adverse effects from the smoking ban. If anything, it's been good for business
and customers as well as for our members."
Both the Hilo l'ribune-Herald and the Honolulu Star Bulletin have reported that the Executive Director of the
Hawaii Restaurant Association, Ms. Michelle Van Huessen, has called attention to two studies conducted by
Michael Marlow at the California Polytechnic State University indicating the loss of business in restaurants and
bars as a result of smoke-free ordinances. I have attached one of the articles to my testimony for your reference.
You should note that both of these studies were paid for entirely by Philip Morris, and the co-author of the second
study, Mr. John Dunham, is an an employee of Philip Morris. You should also note that both studies are not based
on comparing revenue figures before and after the passage of smoke-free ordinances, but on predictions of
restaurant and bar owners of what the impact of such ordinances will be. Since 1987 the tobacco industry has been
predicting that smoke-free restaurant ordinaces will cause a 30% loss of business to restaurants -this predictiai has
never come true. Yet still the tobacco industry continues to scare restaurant and bar owners with "studies" that
predict such loss of business. It simply is not true-not in California, New York, Florida, Delaware, Boston,
Oahu, Maui or Kaua` i, and it will not be true if Bill 260 is passed in Hawaii County.
Each time a municipality has addressed this issue, the claim that restaurants and bars will lose business is raised.
Over 57 studies globally have been conducted examining whether smoke-free restaurant and bar ordinances hurt
business. Only those funded by the tobacco industry have found any negative economic impact, and all based on
predicted or anecdotal evidence, not tas or ,ales receipts. As for the concern for Asian tourists, one indication that
things are changing even in Asia iv that Hong Kong is currently considering the passage of legislation making all
their restaurants smoke-tree.
Dr. Fred Holschuh; Human Services and f:conomic Development Committee
May 6, 2003; page 5
Since the Oahu smoke-free restaurant ordinance has gone into effect on July 1 preliminary indications are that
restaurants are doingjust tine. While it is too early to have good data based on sales revenue, anecdotal information
seems to indicate restaurants have not lost any business, and tourism has not fallen off. Reporter Grace Lee, KGMB
9 News, reported that one month after O`ahu's ordinance took effect, the Hawaii Restaurant Association, which had
opposed the Oahu ordinance, called 40 of their member restaurants. None reported any negative effect on business.
with a number reporting in increase in business. KGMB 9 called 14 restaurants on their own, and again, none
reported any loss of business and a number reported an increase in business. (I did call the Hawaii Restaurant
Association to see if 1 could get the names of the restaurants that they called, but the Association would not release
this information to me.)
The Coalition believes all workers, including those working in bars and nightclubs, deserve a workplace free from
second hand smoke. Second hand smoke exposure in restaurants is often double what is found in a typical
workplace, and it is 4 to 6 times higher in bars than in offices. However, the Coalition also recognizes that these laws
work best when they have strong public support. While approximately 70% of fiawai`i's residents support smoke-
free workplaces including restaurants, the number is less for the inclusion of bars. Should bars and nightclubs be
exempted from the Bill 260 at this time, the Coalition is committed to increasing public support for all workplaces,
including bars and nightclubs, to be smoke-free.
Going smoke-free costs nothing fur businesses to implement; in fact, businesses will save money in reduced
maintenance costs. hnplementatiun will not result in any loss of revenue or a decrease in tourism, in fact, it may
result in increased revenue. It protects workcrs' health and their working conditions, which does much to improve
their morale. Passage of Bill 260 will demonstrate that all counties of Hawaii are committed Hawaii being the
"Health State." Thank you for this opportunity to testify.
'Thank you again for the opportunity to testify. We look forward to the next steps in the passage of the most
comprehensive smoke-free workplace bill in the state.
Since el
Cli rd Chang, MPH, CH S
Dire for
NATIONAL CONFERENCE ON TOBACCO OR HEALTH
www.tobacwcontrolconference.org
FOR IMMEDIATE RELEASE CONTACT: Darlene Colvin
November 20, 2002 (310) 552-6922
CALIFORNIA'S HEALTH, LABOR and BUSINESS LEADERS
CONFIRM 8-YEAR SUCCESS OF
SMOKE-FREE WORKPLACES
SAN FRANCISCO (Nov. 2Q 2002) -While other cities, states and countries debate smoke-free
workplace laws and listen to unsubstantiated threats of economic doom, California's health,
labor and business leaders confirmed the success of California's Law for aSmoke-free
Workplace (Assembly Bill 13). State Health Director Diana Bonta, along with leaders of the
California Labor Federation AFL-CIO, Hotel & Lodging Association, small businesses and
others celebrated the eight-yeaz success of AB 13 -California's most controversial employee
protection law -and the five-yeaz anniversary of smoke-free bazs.
"The Califomia Labor Federation is proud to have sponsored one of the most sweeping
worker health protection measures ever enacted in California or the United States," said Tom
Rankin, president, California Labor Federation, AFL-CIO. "We know cigazette smoke contains
over 4,000 chemicals, including dozens of known human carcinogens. Workers should not have
to choose between their jobs and their health."
"We in California's lodging industry were understandably nervous about the potential
detrimental effects a smoking ban would have on our businesses," said Jim Abrams, executive
vice president of the Califomia Hotel and Lodging Association. "But none of the doomsday
predictions happened. In fact, tourism in California increased each year following passage of
AB 13. We can say with certainty to the rest of the country that a workplace smoking ban is
good for the lodging industry."
-more-
Smoke-free Workplaces
Page 2
"California's Smoke-Free Workplace Law has benefited millions of workers over the
past several years by protecting them from the deadly effects of secondhand smoke," added
Rankin. "We hope California serves as an example to other cities, states and countries that a
smoking ban is good for workers, employers and the public."
"More and more of our hotel and motel members have gone fiuther than the law
mandated," added Abrams. "While the law required only 35 percent of hotel and motel rooms be
non-smoking, most members set aside a much higher percentage due to customer demand. The
fact is that the vast majority of customers prefer asmoke-free environment."
Echoing statements from eight years ago, John F. Henning, former executive secretary-
treasurer, California Labor Federation, AFL-CIO, added, "What was true then is still true today:
death by cigazette smoke should not be a condition of employment."
"The tobacco industry tried to scare our members into thinking their employers would
lose business due to the smoking ban, and that they would lose their jobs," said Michael Casey,
President, Hotel & Restaurant Employees, Local 2, AFL-CIO, of San Francisco. "I'm proud to
say our union members and many employers saw through these tactics and stood up for the right
to a safe and healthy workplace.
"The restaurants, bazs and hotels where our members work did not suffer any adverse
effects from the smoking ban. If anything, it's been good for business and customers as well as
for our members," concluded Casey.
"As the author of AB 13, it's immensely gratifying to see these reports that reflect how
successful the legislation has been," said Hon. Terry Friedman, Los Angeles County Superior
Court Judge and former state Assemblyman. "We fought an uphill battle against the tobacco
industry's massive financial and political resources when we passed the smoke-free workplace
law. We were successful because we stuck to the facts. Our coalition of labor, business, local
government and health groups knew that smoke-free workplaces would benefit everyone. The
law's success and the continued enormous, broad-based support prove that."
%~~1~7//VI ~ir l'I/ ~7p ~ • ioJ'/'I/I//oIGP~'y
Helping you braenre a IIWe seder
PATRON SURVEYS AND CONSUMER BEHAVIOR
January 6, 2003
Although sales tax data provides the on/y objective measure of the economic impact of smokefree ordinances, it
can be difficult to extrapolate from such data internal shifts in consumer behavior and spending. Restaurateurs
attempting to prepare for and adapt to smokefree legislation may find it useful to know how many patrons actively
seek out smokefree environments, how many actively avoid such environments, and the relative purchasing patterns
of both groups. A small number of statistically reliable and veriSable studies have been conducted on patron
behaviors and consumer preferences in response to smokefree policies. It is important to distinguish such studies
(conducted by independent researchers and academics) from those studies sponsored by the tobacco industry, which
rely solely on anecdotal information and restaurateur predictions of economic impact.
S Hong Kong: The first comprehensive survey of public opinion on smokefree policies in Asia found strong
community support for smokefree dining. Researchers at the University of Hong Kong Medical Center randomly
selected 1,320 subjects who were questioned regarding thew tobacco use, demographic characteristics, and dining
behaviors, and asked to predict how a smokefree policy would affect their patronage of restaurants. The majority
of respondents (77.2%) anticipated no change in their dining behavior. Of those who did predict a change,
19.7% predicted that they would dine out more often and only 3.2% predicted that they would eat out less often.
(Lam, T.H.; Janghorbani, M.; Hadley, AJ.; Ho, S.Y.; McGhee, S.M.; Chan, B., 'PubNcc opinbn on smoke-hee poldes in restaurants and predicted
effect on pabonage in Hong Kong,' Tobacco Control 11(3): 195.200, September 2002.)
v Denver, CO: Forty percent of regular bar patrons would visit bars more frequently if smoking was prohibited,
according to a survey conducted by Aspen Media and Market Research. The survey polled 455 Denver residents
over the age of 21. Even amongst smokers, who comprise approximately 19% of the Denver adult population,
there was a majority of support for smokefree bars and restaurants. ([n.a.], 'Denver health bar patron survey final," (Aspen
ReseamhJ, January 15, 2002.)
EI Paso, TX: The Institute for Policy and Economic Development conducted a random survey of 845 El Paso
residents to assess the probable economic impact of a proposed smokefree ordinance. Of those surveyed, 26.8%
responded that they would eat out mare often if restaurants were smokefree, 62.9% responded that they would
eat out the same amount, and 10.4% responded that they would eat out less often. Researchers concluded: "Our
findings suggest that a smoking ban would increase the dining frequency of nonsmokers by more than would be
reduced by smokers - thus, a positive economic impact of smoking restriction could occur." (Johnson, S.h; Soden,
D.L.; Ulh, C.; ~brales, J,~PartTS~rt3: po~ana-lysls aTeconomk unpa s u o s e-Gee fndaor as mantes in
a-Hi
-Paso
del tTrie - - - -
region. IPED Technical Report 2001-3],' EI Paso, TX: Instlfue for Polfcy and Economic Development, University of Texas, EI Paso, May 2001.)
California: A survey conducted for the Department of Health Services measured bar patrons' response to
California's smokefree bar law (AB 13). Random digit dial methodology was used to interview 1,000
Californian adults who had recently visited a bar. The survey found that ninety-one percent of bar patrons go to
bars more often or have not changed their bar-going behavior since the law was fast enacted in 1998. On
average, the study found that bar patrons stay longer in bats and enjoy their visits as much or more than they did
prior to the law. (California Department of Health Services, "Support for snake-free bare grows stronger in California: statewide poll of California's
bar patrons shows drema0c increase in support for state's 2112-year-0Id law prohibNng snaking in bars' Business tMre, October 16, 2000.)
Victoria, Australia: Restaurants would receive more business, not less, if they went smokefree, according [o a
study conducted by Auspoll in Victoria, Australia. Using a survey of 816 randomly selected telephone numbers,
researchers found that up to 52.5% of respondents felt they would be more likely to attend smokefree venues,
while only 29% of respondents felt they would be less likely to attend smokefree venues. The survey concluded
that "overall smoke free venues would appear to make people more likely to attend" venues. (Auspoll, January 2000.)
Tempe, AZ: A month-long survey of more than five hundred Tempe residents was undertaken to assess
residents' response to smokefree ordinances. More than half of those polled (57%) reported that they were more
likely to go to a smokefree restaurant; only 9% reported that they would be less likely to go to a smokefree
2530 San Pablo Avenue, Suite J • Berkeley, California 94702 • (510) 841-3032 /FAX (510) 841-3071
7~~~CR4~ ~D`' /Y~~~y
Helping you breaMe a little easier
restaurant. When asked whether a smokefree baz ordinance would make them more or less likely to go to a baz,
34% of those polled responded that they would be more likely to go and 11 % responded that they would be less
likely to go. (O'Neil Associates, Inc., "AtMudes toward smoking in Tempe: report of a survey conducted for American Heart Associaton [sic),'
American Heart Association (AHA), 1999.)
i• Gilbert, AZ: A survey of 500 Gilbert residents was conducted by O'Neil Associates to assess public attitudes
toward smoking. Reseazchets found that 62% of respondents felt they would be more likely to go to a restaurant
if they knew it was smokefree, 31% said it made no difference, and 8% felt they would be less likely to go to a
restaurant if they knew it was smokefree. When asked if they would be more or less likely to go to a bar if they
knew it was smokefree, 44% of respondents felt they would be more likely, 39% said it made no difference, and
11 % felt they would be less likely. (O'Neil Associates, Inc., 'Attitudes toward smoking in Gilbert report of a survey conducted for American
Heart Associaton Isis],' American Heart Association (AHA), 1999.)
•S Oregon: A survey undertaken by Oregon Smokeless States reported that 8 out of ] 0 Oregon residents did not
feel that a restaurant smoking ban would affect how often they eat out. A majority of those remaining felt that
they would eat out more often if restaurants were smokefree. ([n.a.j, "State of public opinbn in Oregon: 1998 Smokeless States
Tobacco Control Survey -Oregon," (Smokeless States Oregon), [1998].)
Massachusetts: Researchers at the University of Massachusetts and Boston University studied the potential
impact of smokefree policies on baz and restaurant revenues. Using random-digit dialing techniques, 2,356
individuals were questioned regarding their attitudes towards smoking, secondhand smoke, and tobacco control
policies. Approximately two-thirds of respondents reported that smokefree policies would have no effect on
their patronage of bars and restaurants. Of those respondents who felt that smokefree policies would have an
effect on they restaurant patronage, 31 % stated that [hey would dine out more often. Only 7.9% stated that they
would dine out less often. (Biener, L.; Siegel, M., 'Behavior intentions of the public after bans on smoking in restaurants and bars,' American
Joumal of Public Health 87(12): 2042-2044, December 1997.)
New York, NY: The Smoke Free Air Act went into effect in New York City in April 1995 amid vocal protests
that the act would have a devastating impact on the city's restaurant revenues. Four months later, a study was
conducted by the prestigious Cornell Center for Hospitality Reseazch to determine the actual impact of the act on
consumer behavior. A survey of 389 randomly selected restaurant patrons found that, although there had been
some decline in the frequency with which smokers were dining out, nonsmokers were dining out more often.
Researchers concluded that nonsmokers, who account for apQroximately 70.4% of New York restaurant
revenues, were "more than making up the revenues lost from inconvenienced diners who smoke."(Corsun, D.L.;
Young, C.A.; Enz, C.A, "Should NYC's restaureteurs lighten up?: eftects of the city's smoke-freeair act," Comell Hotel and Restaurant Administration
Ouartedy:25-33, Apri11996.)
w Flagstaff, AZ: In Iune 1993, Flagstaff, Arizona, became the fast city in Arizona to enforce a smokefree
restaurant ordinance. A survey conducted by Northern Arizona University assessed the concerns of restaurant
representatives prior to the enacttnent of the ordinance and 15 months after the ordinance had taken effect.
Initially, restaurant representatives expressed a great deal of concern that the ordinance would have a detrimental
effect on sales and would be difficult to enforce. After enactment, however, the majority of respondents reported
that the ordinance had no or no known effect on business and 94% found the ordinance easy or very easy to
enforce. (Sciacca, J.P., 'A mandatory smolting ban in restaurants: concerns versus experiences,' Joumal o/CommunityHeakh 21(2): 133-150, April
1996.)
[FS-15]
W:~FILES~MA.TERIAL~FACTSHTS~Public Support Fact Sheet.doc
13
Review of the quality of studies on the economic effects
of smoke-free policies on the hospitality industry
M Scollo, A Lal, A Hyland, S Glantz
Tobacco ConNO12003; 12:13-20
Objective: To compare the qualiy and funding source of studies concluding a negative economic
impact of smoke-free policies in the hospitaliy industry to studies concluding no such negative impact.
Data sources: Researchers sought all studies produced before 31 August 2002. Articles published in
scientific journals were I«ated with Medline, Science Citation Index, S«ial Sciences Citation Index,
Current Contenh, Psychlnfo, Econlit, and Healthstar. Unpublished studies were locoted from tobacco
company wabsires and through interne[ searches.
authorsa affil arionsar Study selection: 97 studies that made statements about economic impact were included. 93% of the
studies I«ated met the selection criteria as determined by consensus between multiple reviewers.
Data exfradion: Findings and characteristics of studies (apart from funding source) were classified
Comespoaden<e to: independently by hvo researchers. A third assessor blind to both the objective of the present study and
Mkhelle Scollo, VicH°olth to funding source also classified each study.
Centre For Tobacco Data s nthesis: In studies concluding a negative impact, the odds of using a subjective outcome
Control, The Cancer Y
Council, Vicroria, measure was 4.0 Hmes j95°~ confidence interval (Cl) 1.4 to 9.6; p 0.007) and the odds of not being
100 Drummond Street, peer reviewed was 20 times (95°~ CI 2.6 to 166.7; p ~ 0.004) that of studies concluding no such
Carlton, 3053, Aushalia; n alive im act. All of the studies concludin a ne alive im act were su y
michelle.scolloQ ~ p 9 9 p pported b the tobacco indus-
canc°rvlc.org.au M~ 94% of the tobacco industry supported studies concluded o negative economic impact compared
ro none of the non-industry supported studies.
Received Conclusion: All of the best designed studies report no impact or a positive impost of smoke-free res-
AOeP~ 2002. courant and bar lows on sales or employment. Polirymakers can act to protect workers and patrons
20 txrober 2002 from the roxins in secondhand smoke confident in rejecting industry claims that there will be an adverse
economic impact.
moke-free workplace policies reduce both exposure and her colleagues have repeatedly called on advocates to
to secondhand tobacco smoke and cigarette more forcefully draw to legislators' attention the superior sci-
consumption."' Smoke-free restaurants and bars Simi- entific quality of the evidence base relied upon by public
larly reduce exposure to tobacco smoke toxins among health groups in calling for clean air legislation.""
hospitality workers and patrons but also represent a serious This paper compares the quality of evidence and conclu-
business threat to the tobacco industry. lions about the economic impact of smoke-free laws on the
In California in 1987, a I00% smoke-free restaurant hospitality industry based on the type of data used, how the
ordinance m Beverly Hills was rolled back, partly in response studies are designed, analysed and interpreted, and [he fund-
toclaims that the ordinance was responsible for reducing res- ing source.
courant revenues by 30%, claims which later turned out to be
unsubstantiated.' Since then, tobacco companies and allied METHODS
groups have routinely predicted that enactment of such legis- Data source
lotion would severely impact restaurant and baz sales and Studies included in this analysis are listed in a comprehensive
employment."' Health advocates, by contrast, have presented summary produced by the VicHealth Centre [or Tobacco
studies indicating that no such adverse effects actually Control." Centre researchers attempted to locate all studies
occurred.'° produced in English before 31 August 2002 that purported to
Polirymakers are typically presented with a large amount of assess [he economic impact of smoke-free policies in the hos-
conflicting material, with evidence ranging from anecdotes pi[ality industry. Peer reviewed articles were located with
about individual businesses" to scientific studies analysing Medline, Science Citation Index, Social Sciences Citation
objective information collected independently across an entire Index, Current Contents, Psychlnfo, Econlit, and Healths[ar
hospitality sector." Such data are often confusing to interpret using the terms smok• and restaurants, bars, hospitality, eco-
and it is difficult for polirymakers to reach an evidence based notnic, regulation and law. Unpublished studies were also
conclusion. In [heu case study of deliberations by [he included in [he analysis. These studies were located from a
Maryland Occupational Sa&ty and Health Advisory Board, compilation by the Alberta Tobacco Control Centre,'° by a
Mon[ini et a( demonstrate [ha[ [hose opposing proposed request [o members of [he International Union Against Can-
smoke-free workplace regulations lodged twice the number of ceYS International Tobacco Control Network (GLOBALink),
submissions as [hose supporting it, but [ha[ evidence from and an examination of hospitality industry websi[es and [he
opponents was substantially less scientifically rigorous than websites of tobacco companies based in major English speak-
evidence provided by supporters of workplace smoking ing countries, including the Philip Morris "Options' websi[e,
regulations." Similar findings were observed in relation to [he www.pmoptions.com .The researchers also conducted an
Californian Envvonmen[al Protection Agency's risk assess- Internet search with the Google search engine www.google-
ment of secondhand smoke," and in Maryland and Washing- .com ,using [he terms "smok' bans" and "restaurants' or
ton heazings on proposed clean indoor air regulations." Bero "bars", limited by [he terms "economic impact" or "study".
www. tobaccoconhol.com
14 S<ollo, Lal, Hyland, el al
Study selatlion attempts were made to determine whether authors or
Studies included measured changes in sales, employment, sponsoring agencies had ever received financial support from
numbers oT establishments, bankruptcy data, public reports of a tobacco company or affiliated group. Searches were
intentions about or recent changes in patronage, spending or undertaken of previously secret tobacco industry documents
time spent dining, proprietors predictions or perceptions of made available as part of settlement agreements between
sales changes and costs and estimated numbers of tourists. tobacco companies the US attorneys general" " (accessible
Studies were excluded where these made no explicit or through www.tobaccoarchives.com
implicit attempt to quantify the economic hnpact of smoking
restrictions. Studies assessing opinions about smoke-free Analyses
policy were included where the study included a question We used contingency tables and odds ratios to compare stud-
asking specifically whether people would attend venues more ies concluding a negative impact with those not concluding a
or less frequently were such policies to be introduced. negative impact.
Ninety three per cent of the studies located (97/104) me[
[he selection criteria as determined by consensus between
multiple reviewers. DATA SYNTHESIS
A total of 97 reports were located. Studies covered
DATA EXTRACTION numerous local jurisdictions in 31 state or provincial areas, in
Findings and characteristics of studies (apart from funding eight countries. Thirty four of the studies examined the
source) were classified independently by two researchers in impact of smoke-free policies for drinking establishments,
most cases several months before the stazt of the study (MS and 90 the impact of smoke-free policies for restaurants. lWo
and AL). Both assessors had tertiary quafifications in studies examined [he impact for recreational venues. One
behavioural silence and economics. A thud assessor, (I.H) a examined the impact of smoke-free restaurants on hotels and
postgraduate psychology student blind to both the objective of another on overall tourism.
the present study and to the funding source, also classified
each study. Sfudy qualiy
We used Siegel's criteria" to judge study quality: use of Of the 97 studies, 38% (37/97) used objective outcome meas-
objective data (for example, tax receipts or employment ores and 25% (24/97) were peer reviewed.lWen[y one studies
statistics inclusion of all data points after the law was imple- met Siegel's four criteria for methodological quality, represent-
mented and several years before; use of regression or other ing 57% (21/37) of the studies that used objective measures.
statistical methods that control for secular [rends and random By contrast, 98% (59/60) o[ the studies using only subjective
fluctuation in [he data; and appropriate control for overall outcome measures met none of the criteria. The odds of peer
economic trend. The more criteria a particular study met, the reviewed articles meeting all four criteria was 5.33 times that
more certain one can be about the validity of results. of non-peer reviewed studies (95%confidence interval (CI) 1.9
An outcome measure was deemed "objective" it it was [0 15.1; p = 0.002).
based on data collected routinely by an independent agency
covering [he periods both before and after [he smoke-free Funding source
policy was in form. Objective measures included: sales figures OT [he 97 studies, 32% (31) were funded either by [he
provided for [he purposes of taxation assessment; employ- tobacco industry or a group known [o have received funding
meat figures provided [o government agencies generally for from a tobacco company or tobacco industry
insurance purposes; and numbers of new or existing ally."'°""""'°"°°o-^'°"°"°""Four studies did no[disdose
establishments based on business permit applications or reg- funding source, but were conducted by consultants or organi-
istrations to the government agency that issues such permits, sations known to have a connection with the tobacco
and bankruptcy data. industry.1° For three of these studies, there was strong
Unverifiable predictions of future changes or estimates oT evidence of collaboration between tobacco companies and the
recent changes in patronage or spending were deemed study authors."'°"
"subjective". Subjective measures included anecdotal reports The two studies by consultants where close ties with [he
and self report data collected in polls of, or interviews with, tobacco industry had been established and those funded by
patrons or owners of restaurants, bars or simflaz businesses, organisations known to have received funding from [he
conducted either before or after the policy was put in place. tobacco industry were included with the tobacco industry
Another indicator of the quality of a study is whether it has funded studies, yielding 31 tobacco industry supported stud-
been subject [o peer review. The scientific quality of original ies. The funding source was treated as missing for six
research on secondhand smoke published in peer reviewed s[udies1°"^'0'-106 because no data on funding source could be
journals is superior [o [ha[ in non-peer reviewed publications located.
in terms of study design, reporting, and evaluation." A study The other 60 studies""""° °-i 140.10"°"" were
was deemed to have been peer reviewed if it was an azticle funded either by government, health related organisations or
published in an academic journal. independent market research organisations.
Studies were classified as indicating or not indicating a All the studies used in this analysis is summarised in tables
negative economic effect based on their stated conclusions 1 and 2.
about the impact or potential impact on employment or prof-
itability of the various sections of the hospitality industry a[ Study quality and funding
issue. All three raters agreed on the conclusions in al] but one The methodological quality of the industry sponsored studies
of [he 97 studies. The Maso[[i s[udy1° was classified as was significantly lower (p < 0.001) than the non-industry
negative, as per the conclusion of two of [he three raters. 7Wo studies ([able 3). Only one of [he 31 tobacco industry
s[udies1°S° did no[ draw conclusions; we included [hem in [he supported studies (3%) has been published in a peer reviewed
analysis based on [heir face-value findings. journal compared [0 38% (23/60) of [he non-industry funded
Funding sources for each paper were noted after completion studies. None (0/31) of [he tobacco industry supported studies
of all [he other classification tasks. Funding was determined met all of Siege]'s" four methodological quality criteria.
from acknowledgments in the studies (obscured on copies of Indeed, 84% (26/31) of the industry supported studies me[
papers classified by [he third rater). When the source was not none of the criteria. By contrast, 35% (21/60) of the studies no[
clearly disclosed, authors were contacted where possible and supported by the tobacco industry met all o£ Siegel's"
vrww.tobaccoconho.cam
Economic effects of smoke-free policy in hospitaliy industy 15
Ta61e 1 Sh1dNs wing objecliw msasuros b assess acorwmie impact of smoke6ee policies in the hospitaliy industry
~i.~a'
` r MYBS~XyraRert
ssudbs tundNtroas esw[waeeiMlben eso soBwNsdeeey
TaaoMe sabe Badosds and fbpo (199 ~y ~py~ fT9i}J00• CoIlFomla Sbss Board d
rsaipb Ba9sals add9aea ~ Ond CFONi(T49T)°; E4uo6mHo"(1998p tNY of
Or.wr 11999)°; ~ saJ 1}l1tJ°: BouWor 11996 ; FMkhw
alsab aall h °~a6sds aaa (s99fp°; Ilyq~r
nano ; ~dB./a~~tln+t>i~°;~adee
ana tta.wdd~•19!{01; `tMhndNd
Il Nd 1994x'; PoaBc
1y~~ ?npo and Bat
dos (19P~' 9dase
sea 1,99pf1 ~"e r2oalr; Te/lar w
1109311°: WaMeMld N d (2oa11's
Sobs daa odor `[Aewr N d (1999)i°
Empkryment `HIIdNd2t101i0; `Nyland and Cuaalws(19991°;
lerla Hy1ad~~ 12001)'0; Flytsud Mdl9BOO1°; Booms
NumMr d `end aW Csaaairgs 11999x'
esb6llshmenh
BonYrvpky daq Baums and Mokcmwn0'
sswBSe to ssMd iwsdw b axlbseasn
Sdr dab olhsr Pubco 2002"
shldbe aasaluaod bM esgonbelMns or ossweeMe ~ Brno b Nu bbaem induty as°und eu dme d Nr elanly
Taspbb nabs `Lilby M d 119961"
rxotpb •MOSOei Nal
(1991)'Of
ShsdiN tsnsded by teharas sompade a• LsdsMry 90ou9e OOOPPa~ M Na sobaae ialasary
Tazabb sale 'lovendiol N al
raplpb 11990)'•
Saba data odor Applied econanics
11996x'
Empbrmenl `Lilby K d
law4 119991'0' •lilby M
al (1996)00
NumMr d 'Lilby N d 1999^
eaiobllahmeNs
Bold type - psa wNOVnd.
•Use dlwYa iaNw Ihm wnenuow dda bdom sal aFx Nw innoducNOn d polWes.
TOnly rook eadsna dagwdbn vdlh dr sObarco induahy.
criteria' 010 ° ° (p < 0.001). Eleven of these non- razely included an objective measure and were almost never
industry funded studies have been published in peer reviewed peer reviewed.
journals. In studies concluding a negative impact, the odds of using
only a subjective measure was 4.0 times (95% CI l.4 [0 9.9;
Study quality and eonClusion p = 0.007) and [he odds of being peer reviewed was 20 times
Table 4 sets out [he fmdings of [hose studies meeting each of (95%CI 2.6 [o 16b.7; p = 0.004) [hat of studies concluding no
various indicators of high quality: using objective outcome such negative impact Qable b)
measures; meeting [his and Siege]'s other three criteria for
quality; being funded by a source clearly independent of the Funding source and eontlusion
tobacco industry; and being peer reviewed. There was a significant association of tobacco industry
None of the 21 studies [ha[ met all four of Siegel's" quality support with negative conclusions of the study (p < 0.001)
criteria reported a negative impact (table 4).In fact, four of the (table 6). Ninety four per cent (29/31) of [he tobacco industry
studies report a positive impact on taxable sales receipts of supported studies concluded that there was or would be a
restaurants, bars, hotels, or tourism.""' ° negative economic impact of implementing a smoke-free
Only a handful of studies based on objective data conclude policy. The odds ratio for a negative conclusion associated with
a negative impact. None of these meets more than one of tobacco industry support was infinite because none of the 60
Siegel's other three criteria for methodological quality. Only non-industry funded studies concluded a negative economic
one peer reviewed study concluded a negative impact This impact.
study relied on subjective data and was funded by a tobacco
company. DISCUSSION
Table 5, conversely, shows, for those studies concluding Lower quality studies were much more likely to conclude
negative impact, whether each of the various quality criteria smoke-free regulations adversely impact the hospitality
was met. Once again, studies concluding a negative impact industry, and weaker studies were much more likely to be
www.tobaccoconnol. tom
16 5<0ll0, tot, Hyland, et al
Table 2 Studies using subjective measures to assess the economic impact of smoke-free policies in the hospitaliy
industry
SNdiN tlrrlded tram NVreN Miler ItWn Kle Mlsoae IiMUelry
Public seE In~1lKplr«aaNl hom Isa, 120tw1°~BieMrond
patronage ofrosWwmh(ban ~ e ]493 iFT'CT~omm~^N
d Il inn tmo Reseorch
120021f°' Omaer M d (1499 ~ ~ r m. Field
RN I ; MYlmd and 'stun ripe 11999) • tom
1 S 2001 a; Mil and Kriwn (20041 ~
Miller
an Kriwn 11002 Shapiro 2 1 Stydsg 12001 i
Waken d 9 sa
Proprieor pmdk4ws/ perupfirsm d sales II
rM~tg~„1~I~.rMn1~ mid 09bKe
chorgN 200 DrMSerM ~EdsWrdt 120Wt°;Huron
count' Hwah Wrdt 1999'1'• llylalld'drsik
Cuml9 /949}sOt; Jorlp etd~149W1(s's~ Morkham and
twg 'i
s~ wrty eFd l~r!
; #!eba: end Eewom
(194J1i0; SdaNe (T4eb~'i (19966yy''; iM
Corddance 90ard dCmkdu ] ,YorWdn Ads {20011'm
Propriekr pwdkMons/prrcepHOm M war Mmiwa and QuleXe gOT~s; TFIe Conference Boord d
Canodo (I99a^; Dos - . Cpmy CHIR (2001Ins
Eslimoted numisas d ovNSeas Wibrs H Nand Masiill } sr
StudiN ter svhkh (unr6ne puma's unknown
Poprisor pmdlcBOn/ percepdons d wIN Economim Adel Grou 1998 'a.
charges ~ 0 200 ' inn 2 1 'a
SludiN cersdueid Iq{eslpmimKeru «canwMaMe wKh abort Rrlktte Mm bhoeID indusry around IIN Kale e(IM shills,
Proprieb pre~cEOrwf'pipwpllpu d salty MmoRi N d (19911'Ot C I 101; Charkon Research (19941°
changN
SwdiN (ended hY lehacm cempaniN or klduelry grouq wppoeNd IfY the tebesw IMusley
Pubik sell ~e~pred insdions «adud AusooE 1200416; Deaimo nle~9h 1198a1n fobnzio N d t1995J'a; KPMG B«Nh
pahonogs of ndewanis/hon 119971a~ A1oA~ 119991°• Naslond
Rubursull AeeoelMbn 11993 mN
19 ~
Public self reported spsrding/nme spNS Fobdzio Na1119951jp1; Monin Asaocialas
1999 a
Proprieor predktlons/ peruplions d sales Adwn a MarkeRn Info 199 °
change Appi cawmiu 6 CCG~
1995'a; h nResear~
Consul 1 nham Nsd
MoA 0~"'
dzk d " >++sryls' GambN (19911'';
KPMG f'aM Morwtrk 114981'0; KPMG
120011i1; Alorbw 119941°~ Modow
996 MoewoDBlw Morkd~ararch
ll''0° ~~gga~n.
Aka Walws~g9w - 95~" Res[
( EersiMn Grouo f 19971°
Proprietor esfimaM d impaG w Ad~Inbgt A~rkNin~InLo+19971r0;
empbymsm Applied Ecasolnfu (14961 s~rizio N d
119961'x. Ma 998 a; Pdce
Wa tine RopN Starch
I~-~•,;
C~Ms
I~bsr a(n Reswrc Consvhanh
1999 • omlmn Grouo 1199T°'
Proprietor predkfiona/perception of wsl Sollars sl al 119991°0
Bold tYPe . r revlswd; undNline ~ study based w erhmabs of pradicled dwngN ratlwr Than astimotes of actual changN.
Nar a random wrwy.
iOnly weak NWence d wnnx4w wi4l the bbacco irrclNlry.
]Conhd far economic hands.
funded by the tobacco industry. In addition, the industry passive smoking was not harmful to health; 74% of these
studies were less likely to be published in the peer reviewed reviews were written by authors with tobacco industry affilia-
literature. Almost all (94%) of industry supported studies, [ions. Among reviews written by individuals with no industry
compared [o none of the studies funded by sources other than affiliations, only 13% (10/75) reached [he conclusion that pas-
the tobacco industry, claimed a negative economic impact. live smoking is not harmful to health. In logistic regression
These results are consistent with a similar linkage between analyses controlling for article quality, peer review status, arti-
tobacco industry funding and s onclusions in reviews of [he cle topic, and publication year, the only factor associated with
effects of secondhand smoke."° Barnes and Bero"` identified concluding that passive smoking is not harmful was whether
106 reviews of the relation between secondhand smoke and an author was affiliated with the tobacco industry (odds ratio
disease. Thirty seven per cent of these reviews concluded [ha[ 88.4; p < 0.001).
www, tobaccoconhol. con
Economic effech of smokafrea polity in hospitmlily industry 17
Table a Qualiy of >tidisa wpporbd by the Aobaao i~usay compared wish thoas
that are not
~x~ 1 ~~r r ' ~ ~ ~ ~a t,N •:.~z-
4maYlarsisa Il%MN'q°" eswrrw 1s t1:7rsriA:4J O.aab
oW6enie liwmNw wla
O%lfl/31t 35%Q71/bOJsmammr Ukdlr
aiMim mrwwauaw
Su6aCbpw rNiwv 3%tl/31(ei 3@%(79/6~saau.vv 183 (2.4b142.~ O.OQSS
wawnw]raw wl lu
CI, m4tdmcs. inbrvo6.
Table 4 findings of higher quakky ahsdiea
V
~ % y{v` 3
-114~:~'1~~ ~.u tr x _
=t~ a~rr 9ly~laYls. ll%~yl~lt t00ltCf l.Ye ]amww.M id.S3 a.009....~
Indudine on o6pcrtw maa]ua 19%17/371']av.1 Bi%i30/37taawauwa 7.64 0.006
i~ .n
faldad sebp c4ody O%i0/40i 100%i60fb~aa+a mae t12.~ 0.000
InduM17 (n.4i01k. blsa[m m.aw«Im.lm lw-Im,m
Pwrrw~bNgd tb.24i 4%tl/24iw 96%~3~aaau.aww 14.09 0.000
awwwa]w wl Ile
Table _5 Auatiy of Ahldiea amalq d7oas dlat rep4rkll'o negativ4Jmpaat
"hie„ sy jt A" 1@.,
MrAnY dllosr Shed allarb .~0%(0/39t 100%W.]`/33(mmba IS.I3 .,.0.000
a+l q.awlm.la l4
/~i~vp~__. ~_a ~lwww 7.6t 0.006-
Im+gm
tand~d ~a~yvycl~ap~~~y,~. a%tD/3$l ta0%f3u'/3!'~mwb]I t~.qp 0.000
efbt]amrs Ydua®r W]RwMla-Iq IN
1'Nr]eVlan6 3%il/J$M 9771 t.~13~mbaal 14.04 x.000
wwa a].lalu
Table 6 Odda «ei~ fa indiegrora of bwer quaky among sNdiea wilh negative
rnrleluatons compared ro spldNa Iwt wncludMg a negative (mpad
Indadlne ~Y ~I~N,~ .~t1mw ..S.~fg?~+~wwwmws~~4.0 (t.1b 9.9) 0.007
aubom~msmwns aww w.w lu wwlgagla.]m na
Fundd by dw lobacn 94%i29/31~]]]' d%(2f62i'°• InAnN~ 0.001
Indubry a o e~i aurporbd vel was Im Iv.a 11.
67 6q bkamo GMUSky
IVot baine pw minsgd7 97%(34/331 1 fj1 63%(39/62(10 a ]a'1O 20 i2A b 166.7) O.OOd
bYaV]A IO41a 1N ]]L ]a11 Y]M]atl V-]ONN
wA la Ia Ia-11]
vnvwlobaccoconhol.com
18 Scollo, Lal, Hyland, of al
The possibility of publication bias always exists. It is pos5i- a Mangudan C, Bero a. Lessons learned ham the tobacco indushiei
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that detect a negative impact would be less likel to be Public Heahh 2000;90:1926-30.
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the tobacco industry would be similazly unlikely to release Connol jin pros).
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the tobacco industry has a strong motivation to publicise all 12 $ieRN M. Economic imp«t of 100%smokehee resburanl ordinances.
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negative studies adds to our confidence [ha[ we have no[ Berkeley/UCSF Pravenro8ve Medicine Residency Program; American
missed a substantial number of studies concluding a negative Heart Ass«iotion, Califonio A(Fliob; Alameda Couny Health Care
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13 McMini T, Bero L. Paliqq maksri perspectives on tobacco control
Siegel's criteria are a valuable tool for assessing the quality adv«alas' ruler 1^ ragulaton development. Tobacco Conhol
of studies on the economic impact of smoke-free policies m 2001;1o21B-2d.
14 Scholland M, Bxo L Evaluating public commentary an uienfific
the hospitality industry. Our findings suggest [ha[ pohcymak- widence submiBed in the dwslopment of risk assessment Risk Analysis
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(I) Was the study funded by a source deazly independent of resnicriona. Tobacco Conno12001;1a:329-36.
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smokehae policies in Rio hwpitaliy indeshy - i«ludas studies produced
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ACKNOWLEDGEMENTS influence the intentions of bviah b visit Hong Kong and b pohoniae
ITrankS to Dr Mohalmnad Siahputh from [he VlcHeal[h Centre for cabring venom. Hong Kong HevlRs Service Research Group,
Tobacco Control For advitt on statistical analysis, and Louisa Hoey for Daparnnant of Communiy Medicine, Univarsiy of Hong Kong, March
assistance with classification of studies. 2002.
25 Hyland A. Before and alter smokelroe regulations in Haw bxable sale
The VicHeal[h Crntre for Tobacco Control is funded by the Victorian 6a^ ev^^e arrd drinking plvcm in New York $bN. New York- Roswell
Health Promotion Foundation [o conduct economiq legal, and sodal Pork Cancer IndiNb, Juns 2002.
26 Mlllx C, Kriwn 5. Smokahee dining in South Australia: surveys of
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Roswell Park Cancer Institute NCI-funded Cancer Center Support Conhol researzh and evaluo8on report I99B-1001. Adelaide: Tobacco
Grant, CA16056.26 as a member of [he Hiomathema[icsBiostatistics Conhol Research [valuation Unit, 2002.
Core Resource. Dr Glan[z's wo[k was supported by US Natio_na_I Ca_n- 27 Pubco. OBicial figures ham Onbrio hrewxs confirm disastrous effects of
cer Institute grant CA-61021. smorteingtian. Puh-6nd Sat COaRttan-of Ontario. 2002. Access date:2tr
Augus12002. URL http://wwwsmokeinottawa.cam/html/index.hhnl.
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bar smoking bons on visiron ro New Zeobnd. Auckland: Healhsearch, evenh on ha Tasmanian hotel industry, November 2001.
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110 Douala Gounly CemmuniM HwNh Improvement ProIM. Douglas resrourahun regarding smoking bans in Adelaide, South Aushalia.
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2001. 1998;379:1566-70.
t e 9 s
e r
e' ~ ~ ~
Ciy of Kingston, Canada: Smokehee By-law Campaign 2002. ®Kingson, Fronlenac and Lennox & Addington Health Unit -J. Chenier.
wvrw.tobaccoconho.<om
The Dunham and Marlow "Studies" on Smokefree Restaurant Laws
More Tobacco Industry Hot Alr on Smokefree Restaurants
August 23, 2000
The tobacco industry's primary argument against smokefree restaurant and bar laws has become the claim that
these laws will hurt revenues for the hospitality industry. These Gaims have been studied in nearly 100 different
communities using objective sales tax data and found not to be true.'
In an effort to keep this argument alive, John Dunham (of Philip Morris and Michael Marlow (of Califomia
Polytechnic University, San Luis Obispo) have published two papers2~ claiming that these laws hurt business
even though there are no overall revenue effects.
These papers are a great example of how one can do a sophisticated looking statistical analysis on a
meaningless data set. There are many problems:
* The entire analysis is based on a survey conducted in 1996 for the National Licensed Beverage
Association (a major tobacco industry ally) of 650 restaurants and bars asking what the owners predict will
happen if they are required to be smokefree. Such surveys have almost always shown that people predict ill
effects; the actual data on what happens has never confirmed these predictions.
" The analysis separates states that the authors claim have laws restricting smoking in restaurants and those
that do not. Of the 32 states that Dunham and Marlow say restricted smoking in 1996, only 5 had specific
requirements for the size of the nonsmoking section, and some preempt local ordinances.° Given the large
errors in their assessment of state laws, the results of their complex statistical analysis are meaningless.
" Dunham and Marlow criticize the earlier research on effects of smokefree laws on revenues on the grounds
that they do not study profits, yet Dunham and Marlow do not present any hard data on profits, just opinions on
revenues.
* If 38% of establishments experienced lower revenues (and only 6% experience increased revenues) as
Dunham and Marlow predict, this effect would be large enough to detect using aggregate revenues. The
aggregate revenue data based on sales taxes shows no such effect.
" Dunham and Marlow ignore the fact that the State of Califomia did an analysis of the effects of California's
smokefree bar law at the level of the individual establishment, and found that the law did not adversely affect
business, and was associated with an increase in business s
" Dunham and Marlow criticize the early work by Glanfz and Smith e'' which showed that smokefree
restaurant ordinances do not affect revenues on the grounds that they studied all the cities with 100%
smokefree restaurant ordinances that had been in force for long enough to get data on actual effects for at least
a year as opposed~o a random_sample..IncLudina all the _citie_s_ is always better than a_ sample. T_ here are no_
biases when one considers all the cities. Considering all the cities is not "cherry picking."
* Dunham and Marlow state, incorrectly, that the communities that enacted smokefree restaurant ordinances
have "relatively few smokers." This is not correct; the adult smoking prevalence in the cities Glantz and Smiths
included varied from 18.9°k to 25.2%, well within typical smoking rates at the time.
* Dunham and Marlow rely heavily on an critique of Glantz and Smith's earlier work prepared by Michael
Evans for Philip Morris' National Smokers Alliance, which was never subjected to peer review. After the National
Smokers Alliance submitted Evans' critique to the American Journal of Public Health as part of a complaint
about the fact that the journal published the study on the effects of smokefree restaurant ordinances on
restaurant revenues, the journal subjected Evans' critique to peer review and the editor observed the following:
Instead of a compelling critique, however, we find a melange of scientifically inadmissible
manipulations of data to obtain a desired result. These are conflated with a Flurry of
suppositions as to what could be. Suppositions are then translated by mere assertion into
factual "serious" Flaws. Even if Evans critique can pass in the field of economics for
legitimate science -something I do not credit-it cannot pass in this Journal. Certainly, no
economist has submitted so tendentious and meretricious an argument during my tenure.e
" Dunham and Marlow claim that one reason that there is not an effect on revenues is widespread civil
disobedience of the law and cite two newspaper articles to support this claim. They ignore the results of the
California Tobacco Survey, a large scientifically valid study, which showed that 75% of respondents reported
fast food restaurants, 75% of family restaurants, and 70% of full service restaurants were smokefree. This is
hardly "widespread civil disobedience." e, r' "Z
Dunham and Marlow ignore the conclusions of fellow Philip Morris employee David Laufer, in a
presentation to other Philip Morris political operatives:
Also, the economic arguments often used by the industry to scare off smoking ban activity
were no longer working, if indeed they ever did. These arguments simply had no credibility
with the public, which isn't surprising when you consider that our dire predictions in the past
rarely came true. 10' P' 28
Overall conclusion:
The Dunham and Marlow "studies" are just repackaged versions of earlier tobacco industry claims that have
been proven wrong. Policy makers are still left with the choice of basing decisions on what actually happens
(using sales tax data collected by neutral tax authorities) or what people predict will happen (using biased
surveys conducted for the tobacco industry).
References:
1. Glantz S. Smoke-Free Restaurant Ordinances Do Not Affect Restaurant Business. Period. J Pub Health
Mgt and Practice 1999;5:vi-ix.
2. Dunham J, Marlow M. Smoking laws and their differential effects on restaurants, bars, and taverns.
Contemp Econ Policy 2000;18:326-333.
3. Dunham J, Marlow M. The effects of smoking laws on seating allocations of restaurants, bars, and taverns.
Econ Inquiry 2000;38:151-157.
4. Welch C. State Legislated Actions on Tobacco Issues. Washington, DC: American Lung Association.
December 31, 1996.
5. State Board of Equalization Statistics Section. Comparison of 1st Quarter 1997 and 1st Quarter 1998
Taxable Sales of Selected Eating and Drinking Places with General On-Sale Licenses. Sacramento, CA: State
Board of Equalization, Agency Planning and Research Division. October 1, 1998.
6. Glantz S, Smith LRA. 71re effect of ordinances requiring smoke-free restaurants on restaurant sales. Am. J.
Pub. Health 1994;84:1081-1085.
- - 7- - -Giantr S; 3mimz: E.,
atop,
~ ;or'~he effect of ardinaneesrequiring smoke-free restaurantson-res•"
~.a~. o.^.~r -
sales. Am. J. Pub. Health 1997;(in press).
8. Susser M. Goliath and Some Davids in the Tobacco Wars (editorial). Am. J. Pub. Health 1997;87:1593-
1595.
9. Pierce J, Gilpin E, Emery S, Farkas A, Zhu S, Choi W, Berry C, Distefan J, White M, Soroko S, Navarro A.
Tobacco Control in Califomia: Who's Winning the War? An Evaluation of the California Tobacco Control
Program, 1989-1996. La Jolla, CA: University of California, San Diego, 1998.
10. Walls T, et al. CAC Presentation #4.: Philip Morris Tobacco (www.pmdocs.com). July 8, 1994. Report No.
Bates 2041183751-90.
Prepared by:
Stanton A. Glantz, PhD
Professor of Medicine
Institute for Health Policy Studies
University of California San Francisco, CA 94143-0130
email: clantz(7o medicine.ucsf.edu
• DRAFT FOR DISCUSSION PURPOSES ONLY Corrected Document
Executive Summary:
Smoking La nd Their Differential Effects on Restaurants, Bars, and Taverns
By John u tetra d Michael L. Marlow
July 20 ~ ailt~'' Q'Y`aM/-(~
OVERVIEW OF STUDY: ~ ~ty ~ IY1`~_ V
Critical review and analysis of three published studies that conclude smoking bans
present no adverse economic consequences to restaurant, bar and tavern profitst. This
paper concludes that these three studies are based on faulty assumptions and
methodology.
Looking at data from a national survey, this paper determines that the effects of
smoking bans are differential. (or. smoking bans exert different effects on different
establishments.)
FINDINGS INCLUDE:
The three studies in question have concluded that smoking bans present no adverse
economic consequences to restaurant, tavern and bar profits, however:
• Comparisons between cities with smoking laws and those without did not
control for non-ban featttres such as tourism, weather, tax-rate and employment
growth, all of which could influence business.
• The sample groups were not random. The fvst 15 cities to enact bans were used
to collect data These cities have relatively few smokers, giving the authors of
the three studies, biased samples, reflecting relatively few adverse economic
effects to business profits. With few smokers to begin with, it is no surprise that
profits didn't decrease in these sample cities.
• As observed in other studies, ver~ rarely are smoking bans uniformly enforced
by restaurants, bars, and taverns. This makes it difficult to make predictions
about how other businesses might be impacted by a smoking ban.
• The studies focused on revenue, nor profit, leaving out owner compensation For
lost profits, such as raised prices, lower quality and increased advertising or
promotions.
Citing a nationwide telephone survey taken by Roper Starch for the National Licensed
Beverage Association, Dunham and Mallow determine that smoking bans exert different N
effects on different establishments. v
The telephone survey used owners from 650 restaurants and 650 bars and taverns, ~s ~ ~
drawn at random from national lists. The owners were asked questions about seating d~ z p
allocat%ans, attitudes towards smoking laws, strategies towards non-smoking and ~ U^~
• Paper baud in part on a study conducted Cor Philip Moms Management Corp. ~ ~ t,~,,
' Glantz and Smith (1994), 6oldatein and Sobel (1998), Sciecca end Ratliff (1998 ~L ~ 1"
~Blankenstein(1998),Canto(1998) V.'~,,n
4' ~~i
DRAFT FOR DISCUSSION PURPOSES ONLY
smoking customers, revenues and their projections on effects of smoking bans on
revrnues.
FINpINGS INCLUDE:
• Restaurants with lower percentages ofnon-smoking seating allocations
predicted losses.
• Restaurants with higher percentages ofnon-smoking seating allocations
predicted gains.
• Bars are twice as likely to predict a loss in revenue.
N
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Smoking laws and their differential
effects on restaurants, bars,
and taverns
Joy i~ a~ ~ 1,. Marlow
xeprioua s~ co~emporory Ecom~mic Policy,
Volume 18 No.3 (July 2000) pp 326-333
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original a~ticlc pnblist~ed by Oxford University Press,
Great Clan;ndon Std, Oxford OX2 6DP, UK.
Tel: +44 (0)1865 267827, Fax: +44 {0)1865 267774
www.cep.oupjournals.org
SMOIQNG LAWS AND THEIR DIFFERENTIAL EFFECTS ON
RESTAURANTS, BARS, AND TAVERNS
JOHN DllrIHAM assd MlgiAfi L MAF[tAW'
77rrs article eramirrts the effect of restrictive smoking taws ore nsraurantr, ban, and
taverrtt Supparos of these lotto often argue shat they do not harm ffrmt and
. etKrr ~P~~ Oppartantr argue that owners Dater to crtrtomer smo '
and lance man ~t4pnferenees,
a ~ ~+ae/t' impact Pmhtc 77+Ir anicte provides
neuq and danantrrates dmf of ~`~a Iowa amt as busi-
mtanbtg~rd undersWrrdigg of the erorronltc dated
brwux ~ ~ a
fircnt eJj`ectr on dtffenatt front. 7Ae dirbfbut~co dose amp talus seer dif-
of eQeetr 4 erambted trsirtg dam
from a nationwide stoney of 1,30'0 rerlauranR baF and taata7r owners Wlrite acne sub-
sea of
frrrna arc predicted ro suAFr nt+rmu declines barn arc predicted ro be more Uutn
navice ar Ike!) to experience Java as rataumntx An important implfwtlon V drat the
incnaslrtg lever of governrnenfa! resnicrions on smokirrq in dre haspitaliry sector could
gradually impact the typo of service avaltab& ro the pablie. (JEL RZ, Ho}
t. N,1tAOw1CnDN their establishments, others to forbid all
resVicting smoking in restaurantr smoking, and shit others to aeoommodate
ers argue that thex laws do not Itarm~firms sepaza~anas ode in~g in ~rtition8
and may even raise their profits. Recent smoking patios or rooatq and aQ filtration
studies fmd that bona on stnokirtg in eatieg
and drinking pkaas have not impacted lbe little economic research has been pub-
profitability of these establishments, sug- lished on the effects of smoking taws on the
gearing that smoking bate either do sot ~~~ry of rtxtaurants, bass, sad taverns,
reduce detaand or offset sales losses by and almost none has been directed toward
towering costs. Opponents of smoking restric- the issue of how these laws may exert dif-
tions argue that soma owners would find ferential effects on businesses. This articie
it profitable to allow smoking throughout a framework for ezambrittg how
smoking laws impact establishments based on
a ntunber of business attn'butes. Hypothe-
"Fhh u araised rossion or a paper presenuA u seS regarding the effect of smoking laws are
ehe Weaere F.woomse Asodatimt international ammat tested using data from a nationwide survey of
~nN ~ ~ >h`a°. G. ~tM~a°`tM~~ p 1,300 restaurant a~ bar owners. The empiri-
nmax aonduned [a
cam. Vk thank PKNiun aoyea, pmt chatoupta, Bcith cal t:vidence indiwta that smoking laws exert
Warner and three anwryttmos rc&rees fa tbe'a helptnl differential effects on businesses.
commend
Dunhassc Masagec of Fool Issues, PhiSp Marra
Matmgemrnt Cora.
Marloac Rolemy Dcpanmcm olFaonaaiq falltornia tt Gfif11CAL Rt~EYV OF THE U7EgATURE ON
1'olytuJtnic State Univessiry, San Iafe Obrspp, C.t SMOKING LAWS
Fat 917-66I-5379, EmnN john.dunham~ypmmc.com
1. Smoking lows hwc been impoxd on testae- A. Smdia Canrlude Thal Smoking Laws
rams in Alnlu, California, Canxe[ieat Delaware, DO IVOI Ffarm Front
F9oAda, Hawaii, Itlabq INbwis, Iowa, I4tws, Lou6ian;
Ma1ne, Ma~achweus, Midiigan, Mitmaata, Musauei, 1Vtu7e a &tll examination of the Welfare
Montana, Nebtasta, Nevada, New Hampshire, Ned effects of smoking laws must consider all
racy. Ncsr Ymk North Dakma, Oklahoma. Orogon,
Penmyhatua, Ahode [shod, Utah, Vermont Virginia, members of society, our literature review
Washingm,r and wam„sia focuses on the economic effects of smoking
cask 2085579980
mporary Economic Policy
ASSN 1W43529)
Vol. 18, Na 3. ]ssly ?0IX1, J2bJ3J O Western Fionomic Assoriation Intcmational
nunntnat g awtlow: sMOxutG rites ]z7
laws on the owocrs of firms.' Three published Their random survey of tt00 owners rnttdutled
studies have conducted that btraioesses do not that, white 52% last tmsirtess, 6%gainW iwsi-
suffer redrrcedsales as a tesuR of berm. GLmtz ness, and the rear did trot know. Of the 37
and Smith (1994) compare 15 cilia wig t]amets with favttnbL: effah, 32% had out-
smokinglaws with IS matdted control group door seating, and 57%hadbarseating-areas
cities Thry cronclude that "legislators sect exempted at that time-
govcrnment officials can eoact such bealth The studies that find no adverse effects are
and safety requirements to protect patrom unable to detect differential effetxs beattse
and employes is resaurants from the lox- they aggregate erg firnta in a community
im in second-Land tobacco smoke witbout together. This approach conveys contusion
the fear of adverse economic cotuegerences" about effects m¢rted oa iodivldwl 8rtos. gut
(p. 1085). In their smtk of smoking Taws in an uodetstanding of differential eBaxa is
North CaroGn4 Goldstein sect Sobel (1998) eaaential for a comprehetrsive :acid welfare
conclude: "Even in the number otu tobacco- analysis and wtwld lie necessary in detertnin-
produciog state in [he US., E7S regtdations ing appropriak leveb of compemation for
present ~ adverse ecoaamk impact, sect injuttd paRka within the broader framework ~
there is no need for exceptions to the ordi- of social welfare aoalyoa. i
natters based oa such hers' (p. 286). Stdana ~
and liatliff (1998) conclude in their study of ~
Arizona firms that "[t]his stttdy seems to indi- C. Problems with Comm! Group I
care that prohibitirtg smoking in e0 Flagstaff Mrrhodology
restaurants has had m effect on total tmttan- Com~trsom between cities with smok-
rant sales... , If tLeae findirtgs sre true for (ng laws and those without reveal efftxts
communities throughout the United States, from the Taws only whin stadia properly
then other cids rxn enact simiLtr lava, whkh control for nonban factors that affect setae
protect patrom and food servioo arorkers from Previous stadia matcL dries on the basis
tobacco smoke, without conarm chat restau- of poptdstion density sect sme and trtcdian
rants will lose buaincss" (P• 1~)• income. However, it is unclear whether these
factors control for differences k totuiamt,
B. Previous Studies Canna Uncover weather, tax rates, and empL>yment grt7tvdr, {
DifJ'ertntia! fiJjeces all of whidr could also influence businesses.'
Momtmr, studies compare ratios of restau-
These three studies all rely on a metbodol- rantlbar sale to total sales to examine eco-
ogy that examinee aalea rat revenues in dries nomk effects of laws on firms. GIaMz and
that Lave enacted smoking bare by competing Smith (1994 for exunpk, state tLat, "If an
them with control cities that have rwt adopted ordinance adversely affected restaurants, this
such laws There arc seritrm methodologial traction would be exaxted to drop when the
problems with this approach.' Otte problem ordinance was in fora" (p. 1088). However,
is that gross rotail Saks or tea revenues are when Worthen factors are not controlled for,
not useful measures by which to gauge ecro- this ratio cannot reveal independent effects
nomic effects on a diverse set of firrss. For of Taws on firms.
example, on an aggregate basis, firms subjeM
to a ban may show no net tffect on sales even
though one-half of firms showed gains and the D. Sample: Are Not Rwdom
other half athibited losses. It Is not portico- p~m studies have not used random
tarty ttselul [o conclttde that nothing oavrred. samples For example, Glantz end Smith
1?vidtnce of differential tffeeU was uncov- (1984) chest "Ihe first 15 US dries to enact
eyed by a Peat Marwick (1996) study o[ [he smoke-free ordinances affecting restaurants"
1995 smoking ban in California restaurants. 108 This sate bn osea a
(P• P • 8 P problem
]5a impan nt suns leas on cmnmu and because these locatiom Lave relatively few
producer surplus mttW ahq he eaammW; see 73eeler smokers since otherwise they would probably
and awrpnr (199]) and 7h:mMav aa1 t}emh6r (1995).
£wan's (1997) renew or Glaah and Smah (1997) d. Glantz std 5mah (1994) xketed control sties
paints out numeroar agtirdral laws and caneludtl that that did apt nlaMate smoYina tiara; however, Evans
findings of no etfeas arc uawsrranteJ. (1991) touod that coon than IwlTwert mec4ssificd
2085579981
320 COtrIBMPORARY ECONOFIIC POLICY
not be first to legislate bans A sample aelec- G. Summary
tivity bias arises because such locaions world Previous studies offer little information
tend ~o experience relatively little harm from about the economic et[ects of bans on retau-
bars. Moreover, local legislators arelttely to tanrs and bars. Sample selection bias and a
be optimistic about Iota! economic condttiora statistical methodology based on community
since thry are unlikely to promote laws that average and control group rnmparisons do
jeopardize tax revenues. The authors then not clearly isolate eoemotnic effects. No infor-
appear to have handpicked laattorm vvltere motion on bow such efecrs differ between
economic downturns in the restaurant and bar etablishments is roported. Many nonban fa~-
xctorsare tmlikeiy following passage of bans. tors that affect revenues are not properly
- Pmptrical reaotts arc then subject to two contro8ed for, leading to serious questions
xkction biases Fast, authors have "cherry- about whether studies tell us much about
picked' samples that wi8 ezbtbit zelatively (he effects of smoking laws on firms. Impcr-
few adverse effects from laws. Second, sear fen eaforcetnent and sample selection prob
pi'tag calls inm question txsadtreiom that teens suggest pproblems with predictions of
adoption of similar taws to other Itlwtiaas how laws wotttd affect other cities. Finally.
will yield shnilar etts;cta. GStie with laws and studies focw on revenues, whereas profits arc
those without (control groups} are disa;as0ar dtc more ttsetul indicates of economic effects
when tt comes to amokiag tsataes, and it 15 on lttns.
tnlikely that adoption of bans to odor titles It is also important to realize that fiad-
would go as stnootitly u in titles that were togs of no negative effects oa revcnttes in the
first to adopt them. aggregate could be consistent with a state is
which firms have not reached an optimal mnc
of smoking and nonsmoldog seating. How-
E ~ Baru Art Nor Unffonnq ever, this situation does not ntxessarily mean
that banning smoking is effrcieat because
Smoking bats arc not always folly change in community attimsks would most
enforced In California, for example, liltely ]end m seating changes by firms that
widespread tan? disobedience appears tom- ace morn optrnrsal than from govemm~ent reg-
mon (Jilanksteia, 1998; Canto, 1998). This ulatitm. No atlvetse revenue elfats does not
indicates slut some pertx:ntage of fume wotdd nay mean that future revenues would
fie adversely affected by fuU twmplianca- not be lower than they would otherwise have
thus validating claims that smoking bans been as firms adapt [o changes in smoking
adversely affect some firms. Noncomplying Preferences. However, lack of adverse effects
firms would also lead to suffer groatet effete may simply be a result of serious statistical
from fuller wmpliana. Differences is cam- flaws in previous studies-
pliance rata compound the problem of nnak-
ing prediciom about how other locations s. ~ ~ tADDO. OF SMOIONG LAWS
might be impacted Coax (1960) provides a general frame-
work for how toms efficiently deal with the
F. Studies Focus on Revenues, Not 1'rofu smoking issue in the hospitality industry, and
demonstrates that private anarlcets internal-
Owners may attempt to overcome lost iu extema!(ties when [here are trivial trans-
business by raising prices or lowering product action costs and property rights are dearly
quality. Owners may also iacreax advertising assigned ~ Although this study does not focus
or provide promotions that add to costs. if so, on the externality issue per se, applica-
profits will change. Previous smdics examine lion of the Coase theorem has impoRant
only revenue, which do not indicate profits. implications about how owners allocate air
spas within etablivhmenu and therefore
5. Duntum and Marlod (2000) anger ital. whde how smoking laws will affect profits.'
restaurants aul openk m states Nat hwe exacted
smoking restdniom also tend to arttt a larger slave 4 See Boyer and Marlow (19%) [m a more detailed
or Iheu sestina to noxsmotitg rue, tltia hu litre Io do dimaaioa.
wish presenq of a smoking Int. Rather, their eastooren 7. Ban proponents argue dun tnxpayets subsidize
simply have atroager prerertngs fm snch noting. higher heahh cart cents of m,okcrs Howcvcr, Ise
2085579982
ntrtatfut a kt~ltcow: skfoetntc uws 349
Although the air spas is commonly cvattnner bases and marginal coats ~ acwm-
viewed as a public domain resource, this is modatioa Another testable hypothesis s that
move within the oottfmes of private toms. adverse effecffi are higher fw firma wteting
Whether m ownu caters wkly to soak- to relatively msnp stnoke~ as flmos with taw
ers w to nommokers, w aooommadatm sackers haw ahrady found it profitable to
both, depends on wsnvner prefcrerMes and rolmtar0y meet ngulationa.
margiml cotta of ttccommodation.°
'I}ansarsion costs are not prohibitive w o~slanort oc anra
because owners act as inttamedierks between
smoking and wt>:[roking customers. Akgoti- Survey data co0octed by Roper Stench
anon tlccurs via owners who determine what for We National l,iceosed Beverage .gaso-
air space allotstion is consistent with matt- ktvs iofiu ban. The~xk~
imt>m proflffi, and is the way, Private mar- P~ surveq
keffi tt:nd toward intemiliaticm of enter>mli- was ta>adoRad during the period atF Septenr
ties. Iaaortxt decisions displease patron and bar 5-12, 1996. The sample mmieted of '
lower 8ta owneratmmegers ~ 650 restaurmffi sad 650
Smo~ng regulatiwa shift ownership of the bara~taverns across the United States. Seen- i
air apex from reaffiurmt and bar ptnpd- P~ wen drawn m a statistka0y rmd~ '
etora ro iadividtnls who prefer that reshio- mercer from nstitmel lists provided by Sur- ~
bons take plan. Options facing atstomets °C1 Sampling, Inc., and an applicable to all
sorb eatablahmenta with a mashaum cam- i
may ehsng°, and amotmg tatstamers may j
choose to spend more time at hoax ether Pfing nor of aPP~*~' ~ P~t-
Wmgoing out, whit wtumokera may apcad ~ Points. The survey imtrument iodudes ~
more time at firtas when they believe that 9°OariODS pertaining n seatirtg aeration, 1
laws im etrvlromtentsv attitudes toward smoking laws, atmtegiw to
Supplyp
~id~a eHeds arise when laws change deal with kmg atammcts,
tpet by requiring tbat firms atpend more reventxs, and ptojeedau of effects of amok- s
retastssces eccoasmodarittg ntmsmokaa m ffig laws on raventxs. The sample v tlivLied
the Lospitality industry, Proms are deter- into stake tviW and withtait ~d laws,
mined is a relatively free market, with a ktge ~S the dasei8ation system of the Center
number of suppliers snd twtoaxra10 Owe- fw Disease Control that de8ow amotiog bras l
ers detetrnioe hryela of different attrt'6trtes, as laws alloying w nquiriug aoaantokiog ~ec-
incltrtHag pda, tptality, qumtity, cuisine. and tiartc in restanrmnatt
smoking aoeomtttodation to mathnbe prof- The sample provtties many advmmges
its. 1[ is m empirical gtuation av ro Low overWceetaedinpreviouasmdieaThissmdy
profits will change following stnolmsg laws '~Q tLm-level data, fac0itatiog the analysis of
A testable hypothesis is then that reatrictiom dishrbuhonal impacts. Thu is a rmd~ sam-
ple and dos aw sttfkr from selectivity bias
eurt differential cffects m pro8ffi. F.ffecffi problems Tlx random naln[e d tLe selec-
should also Yary between restataaat end bar tiaat 1 oho m:nimiron. potential fw bias
industries, simply because of tSffereoces In Ming to imperfect cpmpGance issues. Thts
(t99t a tbu bus ao not a0ae4 ate ~Ple does not [hnoae firma on We basis
while
AI
~tvn(
) usves dre soaey tu.. naLt of wLether Way operate order amokmg laws,
thek euemal err bsot ~ also and question were pond to owners under
aoa Zimmcrmm (1991), who emu tWt paaFe amolre We essuvrpdon of fu0 enforcement. Bu[, a9
tick bas been verenfmared by OSHA with previous studies, this date set focuses on
a rrs impormmw otamommodanae nomaokem h reventrea An emminadm of profits wotdd be
evident io indastry trade tugati0a. Sec [a mumge, preferable, but we lmow of no data that cm-
wWer (199<) utd Fcachtmao 11992).
9. Cmua a aL tt996) (nand teat smoked diced out nee profits with aaioking Iaws. However, the
less hequmt[ly toaowing New York (Sys hers d 1995.
On avenge, emokers onnpwtt nonwakars by x2138 per 11. I.xd wmmooide may oho irapeae has, but
week thus are mt ioelodN beer bmure we do sot knew
ter. Pisauraot sad Inr Durkee aro sot perfatb menu beatiomr of theta Howewx, bal laws me ku
mmpetitivc heause produen ate not 6omgenaour common b senora w(fipot So>abng ttws-fin the rtau
lwvmver, bxause of ease of mny, ptoaa might go ro meawn provides ¦ Nod manna of reahicdam Lad
nonnd N the bug run. b9 buvinaeea
2085579983
3l0 CONTEMPORARY ECONOMIC POLICY
TABLE 1 reason to fear economic impacts. But, assur-
Erpected Revenue Changes antes of no effect appear somewhar mis-
M t1rAS Snoki¦a No placed green that 38% of owners [hat have
ra. G.n already operated under some form oY a law
predict that virtual bens lower revenues.
Percentage of Restaurants Table 1 also displays expected revenue
Frigher 6x sx rx changes by owners of bars. From the entire
Aevanues sample, a ban is predicted to raise revenues
Loa¢r 39 sa bz by2%ofawgers,lowerreveauesby83%, and
Revenva rodutt rto ells
No Ctunge 51 51 49 p nge by 13% (2'Yo provided no
ooa•r Xnow a s 3 prediction). Again. using a X test, responses
Observnnrm 650 444 ~ do not differ signdicaaUy when brokrn dowq
Peroenuge of 9¦rs and "r¦varm into stales with amt without laws, thtu indi-
Fllgher zg, 2x lx eating that firms that have already experi-
Rerenaa enced smoking laws offer sinillar predictions.
Ltnrer ga SS 75 A X= tert also indicates that responses
Raveauq sigtti6ceatly differ between restaurant and
No Cttsnge is 71 18 barhavern owners. Owners o! bars and tav-
DoNt Roav z z 6 ecns are more than [win as likely to predict
obratvatlum aso sza i~ decreased revenues, indicating that laws are
expelled to impose effect Wat differ across
1ndLL5friea.
focus on revrnues allows for the direct com-
parison with results from previous studies. It
is also importagt to note that economists tend VI. ARE OWNER RESPONSES CONSISTEM
to be stupiclous of survey data asking about wtrt+ T~ Ecotlowc tnooEL7
probable effect. We attempt to overcome this A potential problem with this analysis
problem by comparing responses of owners stems from the survey nature of the data
who have already tern attbjeU to smoking and that predictions grey not reflect actual
restrictions with those who have not, and we events-a problem characteristic of survey
are inclined to rely more heavily oq responses analysis of possible future events This short-
by fums that already here experiegced amok- coming is ameliorated m large degree by
ing restrictions, determining how responses vary by current
seating allocations. That is, do firms that pre-
y. OISTAIBIIRON OF ECONOMIC FFFEC7'3 diet adve[se effects tend to allocate relatively
few seat to nonsmoking use-or cater to
Owvers were asked haw revenues would relatively marry smokers? If so, those firms
change Yollowing laws requiring that all firms catering m relatively few smokers and allorat-
become virruallynonsmoking, Table 1 displays ing relatively many seat to nonsmoking use
expected effects on all rtstatuant, as well should predict revenue gains or no revenue
as Fnoken down into states with and with- effects. Moreover, az disrnssed above, these
out smoking laws. From the entire sample, a owners may now attract smokes that pre-
restrictive smoking law is predicted [o raise viousty were not pleased with their policies,
revenues by 6% of restaurant owners and and establishment that previously catered to
lower revenues by 39%. Just over 504b of smokers may now compete with other firms
owners expected no change, and 4%provided on the basis of price or quality.
no prediction. ONy data on restaurants are examined
A X test indicates that Use pattern of because of UtUe variation in stating allora•
expected outcomes reported by owners in tiotu of bars }nd taverns. Table 2 indicates
smoking law starts does not differ signifi- that 40 restaurants predicted revenue gains,
cantfy (5% level) from those in no-faw states. ~q predicted revenue losses, and 329 pre-
Managers with experience of dealing with dieted no changes." Relationships between
laws then offer identical predictions as those
without them. This 1S interesting ltecause ban 12. 2k<nty seven owners did not Imow what to pro-
advocates often argue that owners have no diet and have been atdudcd from Wit analsSis.
2085579984
DtlNtrAM 3 MARI.OW. sntptcota [.AWS ri1
predictions and seating allocations are coatis- where
teat wi0t erpectations. Fums predicting losses
have rektivtly low seating allocations to non- NS, =percentage of seating allocated
smoking use (38%). which strongly indicates to nonsmoking use,
that they stet to large populations of amok chain; = 1 if fvm is a member of a
era. Firrsr predicting gains report relatively corporeec chain and 0 oUterwix,
high seating nonsmoking aflotationa (7096),
which suggests they expect to attract smokers a8er =Years Srrrr ~ been in bttsineas,
who previously did not like rhea nonsmok- Bizet =number of employees (full-time
ing policies Finally, 6rnu predicting no rev- ~ p~_t~)
erne eReets have aeathrg aflacationa (54%)
much higher than those predicting losses. and = L if bu/tavern and 0 otherwise,
slightly below those predicting gaGts. and
Tabk2alsodisplaysseatiog acationsbro- law;.1 if state smoking law is present
ktndavrtintoreataurantsthatoperateinatates and 0 otherwise.
with and without smoking laws Again, under
6odt oondidons, owners preditting revenue The dependent variabk change; = 0 if owner '
gains or no change tended to albcate relatively expects either ao change or a rise in rtwenues,
marryseabrortottuaokingrrse,andownerapre- andlifreventresarepredictedtofell.
dieting revptue lasses twded ro elkrcate vela- The percentage of seating that owners
tivelyfewseatsrorrortsmokiaguse. allocate to noasmokfrtg use 1QS; is expected
In sum, predictions of revenue changes to exert a negative influerrx on the probabi4
are corrsiatent with the economic model of ity that revenues svifl fag since this variable
seating alhxxtians and support our empirical indicates how rttany nonsmokers are served.
esddenoe demonalrating [hat kws exert differ- Whether an establishment is a member of
cults! effects. a corporate chain is expxted ro btflueace I
Ibtential for bias deurvca reiteration responses if drain member offer greater
Owners may oppasc smoking laws for pex- accommodatiat of smoketa and nonsmokers
Bona! reasons and, as a result, exaggerate as alt element of ovawfl corporate s[categy.
[heir expected coars.ts One m' [imagine that If true, chain rnentbers would be less liltely
smokers ate interested in odter amok- to predict revenue falls and the expected sign
era, sad they may exaggerate coals of laws. on chain; is negative.
However, we have no information on the years in business, age;, is expected to
likctihood of Ihi4 event, and know of no data pt~iv~, affect probabtlitles of revenue
set that contains actual profit effects and drops. Aocommodation costs may fie post-
seating allocations. Moreover, while owners tively related ro age of buildings, and older
may have personal views, it remains audear firms aeoortunodate Icss, given that they
whether views regarding smoking wouM over- (,end to cater ro mom established end sta-
ride prekrencta for manmmng the value ble customer bases than newer businesses.
of their firms. Whether they profit-meximi¢e Firm size, size,, is rotasured u number of
or cater to pctsottal preferences regarding employees and is expected to exert a neg-
smoking rcmatns an issue for faints research. alive influence when Beak economies exist
- in accommodation. For example, larger firms
VII. LOGR MODEL OF l7fP[.CfED may find it easier or cheaper to separate
eetEeate etlat[t~ES smokers from oonstnokers. A positive sign
A qualitative choice model estimates the is expected on bay following the discussion
probability that an owner wtith a given act of that bars taverns find it more costly to sep-
attributes predicts that bans lower revenues. orate smokers from nonsmokers and their
The following logic model is estimated. customer bases have less preference for non-
smoking xating. Table 3 displays logit
(I) change, = f(NS„ chain;, age;, ma[ions for all firms, restaurants only, and
size„ bar;, law,) barsJtavetns samples,
Esthnetian based on all films supports
!3. see aerrcns et at. (I99r) and KerkNiet (1994) many of the eapeetationa. Higher shares of
for wncems wqh svcVey mt.. nonsmoking seating lower the probabflity that
2085579985
332 COPtI'EMPOIUAY ECONOMIC pO]ICY
TABLE 2
Porcentage of Seatilig Allocation to Nonsmoking Use by Restaurants
Predietlw Mee MaNaa Std Daa Nember
Ali stars
Itcveoue gads 70% 95% 39.9 40
Revenue liana 36% 37% 36.1 Z54
No c6arya 64% 75% 36.7 329
Smoking Law Staoea
Rtvenue gaits 72% 10091 39.1 27
Revenue kma 41% 45% 37.1 167
No changq 68% 85% 39.3 229
No-[.aw SWa
Revenue gslm 66% 80% 39.7 13
Revenue loxes 31% 2591 33.6 87
No changes 36% 6096 381 100
TABLE 3
Logit Model of Revenue Change
Ail Parma RerlaufaNa BaNraverns
Constant 0.26 033 1.39•
1.36 139 535
NS -OA2• -0.02• -0,01•••
6.L1 7b8 1.66
Chain _0.29••• -033••• -0.25
1.86 Ln oe4
Age no1•• ool•• ool
220 1.95 D.96
Size 0.01 OAI••• -.00t
138 1811 053
13ar 1.30`
7.69
Law 0.13 0.03 0.43
0.94 o.lr 1.62
Log Likelihood -648.73 -380.86 -26552
Ohs with Ikp .0 465 769 96
OM with Dap =1 793 294 539
Obsavarlom 1256 623 675
Dependant wuiabta = 0 ((owra expects ao c]'anae. or a revenue iocrcau, = l i(owoer expena a revenue detrcaac.
Arympmtic r shtitlm am given hekrw ateoattd me~icienta.
. dcoou sigtrianrrt et .Ol, A9, and .10 kvak rupectively.
owners eapect adverse rt:venue effects, chain ence of state smoking laws do not signifi-
members are less likely to txpetx revenue cantly influence the egtratitm.
reductions, older limo are mote likely to Estimation based on onty restaurants
expect revenue derlineR and bar ownets are supports the same significant relationhips,
more likely 1o expect revenues to fall than except of worse the hart variable has been
are restaurant owners." Firm size and prey- removed from the equation [n addition, firm
14. Ahemstive spadficetbos checked (or model # Size is estimated to exert a weak (.10 Ievel)
hilhy between smaa and large auhlehmanx, yonog positive effect on the probabflity that an
and otd aubOsbmeon, and chain versus independent owner expects a revenue loss.
firers. to all use; the percentage o(rronwrokiag seating Estimation based on onty bars/tavems
rcmahud sigelmnt end o(the same sfgn. Tho smorng gilds ust one si ificant factor: the share of
law variable remahted irdgni6nat. 37re other variably Yi J Bn
rerotixd the same propcnin nonsmoking seating exerts a negative effect,
2085579986
r
,
DIJNHAM R MARI.Ow: SMOKING [AtVS 333
as expected and is rntzsistent with the other Boyea, WsBiam l., and MieheeJ L Mubw, "7Le Puhac 111
estlmatl065. '[7119 effect is Daly weakly' sigaif- Demand [a Staeltiog t3am," lhh8c Charcc, 88:1-;
icant at the .10 level, bu[ estimation «sults luly 1966, 57.-a7.
suggest that most barltavem owners expect Cenro, Minerva, -Califormrc Putt on Despite Boo.'
that a virtual smoking ban will lower revenues. R4shirgkrr ltw. Sa. a septeasber 24, 199e, p. 7.
Ctlase, RomWrl, "rise Problem otSoeiLLCal,"3ourrud
afLaw a,d Eawmssurx, 3, Omaber 19fiQ 1--M. '
VIII. (x)NCLU310N Corson, Dnvid L, Cheri a Yonoy and (Sthy A Erq
"Should NYC's Restaurateurs IJI,']san Up7` Carrell
-[his article examines the revenue effects Itaet a„d Itamaanr Adnsirdrwosoa 37.x,
that smoking laws exert on restaurants, bars, Aug ]gy4
and taverns as predicted by 1,300 owners of Dunham, Johq and Michtd L Madw, "1'he B6tav
these firths. While a subset of Hans is IHrely oy S~~a Ipso ~ ABOCatbos ~ Renau-
to suffer adverx revenue effects following a ,onto, Itars, sad liwetw," E¦vvmntir rnyrsuy, ia:l,
smoking ban, bars and taverns are predicted Jaousry 2000, ]st_]sy.
to expetience adverse effects more than twice Earn, attehael 1G "A Review M Zye EBed of
as often es rtS[811r8nts. '[bin is consistent tOtdigaotxs Rcgddng Smokeliee Rataunuta
with "reality checks" that indicated that rev- an Reauurattt Salp," wwwspeatap.osglpd4
emu predictions reflect owrar perceptions mttcom.pdt, Marro 199'7.
of customer preferences regarding smoking. E~sdstman, Ilavla J• "staakirsg is Reataunels-
Adverse revenue effects were most often pre- ~^na ~ Haan*al~ty ~ Cadgvs:g,
dined by owners allocating rclativety little br:7, July 1992, 65.
seating to tttJnsmokiag rise, and ptrsitive or GIm4 StaNOO A" and Iha R a Smk4 "The F3rect
neutral eHecn were most often predicted by d ordimocea ~nlS°a sin >wt+~c.nb
owners who allocated relatively much of their oa Resuraaat Saba," Mrkan fotorso! °f Public
seating to nonsmoking use. July 199a, loci-1tB5.
77u interesting public polity issue con- EHeu d ordiatrors ~'1"h'as smoke'
Gems the distnbution of effects, and not the Foe Remmuta and Bars on Rereaues: A Folbsv-
average e$ect exerted on a particular Indus- Up," Mtedmsa Jomrrt 74dba xe¦las, n:to.
Osdnher 1997. t6Br-76?J.
try. It m true that 51% of restatlrent owners poldxelo, Atbm O., atsd Radial a Stsbei, "Bm4.ron•
predicted no revenue changes, but It is inap• r„an~ 7hhsooo Have Not Hun
propriete to rnuchtde the[ no effect would be RestauaM Sales io North Caroliro,"Nod, Coro74m
exerted on this industry sins 39% of owners ,vemadreunsa<, s9~, sepiJOCL 199x, 2a4-788.
predicted that revenues would fell following Gnvellq Iona c. sad 17esob Zismoermaq "Gaueua
a virtual smoking boa. Similarly, not all bars 7tres to Pond HWth Gre 7letomc M Eaanank
and taverns are predicted to experience iden- Aoalyfir,• CRS Ripon for Congreq Mud, e,199a.
tical effects, Imt the distribution or predicted Iredvaet, Joe, °FaitsutOg ¦ Logit Model with Rassdom-
effccts is much tighter (83% predict revelmes lad Dan: 'nee sae tlr Cbcaioe Uae,• .rrwanaan
to fall) for this industry. loumd oJsmdadn, 36:t, ApN 1994, 9-16.
1<e, Dwight. R., "EMirorsmentd Fanomirs ¦tsd the
Ststi¦I Coat of Smek»g,' ConmrQprory Ibtiry
Rl:FE8E~C6.S Lauer, 9:1, lanwry 1991, 8192
Peat Muwick IJP, for the Southern Caldomia Busmen
Allen, 7<remiah M., "Environmental Ecastomia sad tht Associetio4 "IM lmpau d the Csnrent and Pro-
Sndal Cost of Smtrkiag: A Comment." Cardarspo-
roryfbliryGnrcr.l0.l,Iaouary 1992, 101. Pow Smokatg Bam w Rvstauants and Bars in
Betker, Gary 5., ¦nd Kevin M. Slurphy, °A S(mpk 7M- Calaomiy" Apnl 19%.
ory at Advenlsing as a Good or Bad," QYOnnl3 Sciacn, Jdsn, sad Michael 1. RaniII "Prohibiting
Journal a/F.:onwniu, 108:1, November L993, 941- Smakiag to Restwrsati EQeas w Rcstausaas
964• Saks," Amolcan lnwnd o/lleahh Pvnimrton. 123,
Barrens, Robert P., Alok K Bohata, and Joe Kerkvliet SeptJOcY. 1998,176-184.
"p Randomised Respome Apprwnh to Dichoto- 7remblsy, Card ti., and Ypxor J. Tarnblay, '77se
moos Choitt Continaem lytualkn,'Amrricaniow- imPam d Clgatene Arlverluiog on Conmtner Sur-
u aJAgn'culmml Erevsamir7. 79:1. 14bnury 199'7. ph's• Pro9t and Soda) Weaate,' Caurrnrporsvy
Blanksicin, Andrew, `Entorcement Cbuds Issue of Economic lbliry, l3:l, Janswy1995, 111724.
Smoking Ban,- La Ar(gelrr 7hnrr, htetro See. 1Vaiter, Kale, "Design No-Smoking Section," jturaa-
September 21, 1998, p. 3. mru Bndiwa, 93;1, lanwq 1, 1994, 1t4.
2085579987