Business Facts

Business and Economics

Business owners and policy makers often have questions about how smoke-free policies might affect the business climate.  The good news is that there is an overwhelming amount of evidence that shows smoke-free policies are not only good for public health, but they are also good for business.  For details, click on the sections below:

 

FACT: Smoke-free Laws Do NOT Harm Restaurant Sales

  • A scientific review of four cities in Texas analyzed tax receipts from restaurants after a smoke-free ban was passed and found no long-term effect on restaurant sales or revenue.1
  • Over the years, many studies have reached similar conclusions—that smoke-free restaurant ordinances do not harm restaurants’ sales.  These studies looked at smoke-free ordinances from different parts of the country during different economic cycles.  They include communities in California, New York, Massachusetts, Texas, Arizona, Indiana, Wisconsin, Florida, Maryland, and Kentucky. 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 ,9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17
  • Even in the tobacco growing state of North Carolina, where adult smoking rates are higher than the national average, researchers found that smoke-free restaurant ordinances did not impose economic hardships on restaurants or restaurant owners.  Researchers compared the impact of smoke-free ordinances on restaurant sales in ten North Carolina counties—five with smoke-free ordinances and five without—and concluded that there were no differences in restaurant sales among the ten counties after the ordinances took effect. 18

 

 

FACT: Smoke-free Laws Do NOT Harm Bars

  • No independent study has proven that smoke-free laws negatively affect the bar industry.  Research looking at communities in California, Massachusetts, Oregon, Texas, New York, Florida, Maryland, and Kentucky showed that smoke-free ordinances had no negative effect on bar sales.19 ,20 , 21 ,22 ,23 ,24 , 25 , 26 , 27   In fact bar businesses are not more sensitive to changes in smoking behavior than other hospitality businesses.28
  • One of the most recent studies to look at the relationship between smoke-free ordinances and bar revenues was conducted in El Paso, Texas by the Texas Department of Health (TDH) and the CDC.  Researchers concluded that the sales of alcoholic beverages were not affected by the El Paso smoke-free ordinance.29  
  • Similar results were found in the state of Florida, where retail receipts for taverns, night clubs, bars which serve food, and liquor stores, remained unaffected by the state’s smoke-free law. 30

 

FACT: Smoke-Free Laws Do NOT Increase Unemployment

  • Opponents of smoke-free laws cite unemployment as another reason why smoking bans are bad.  To examine the merits of this claim, researchers assessed the number of restaurants and the number of restaurant employees.  What researchers learned is that restaurants were more profitable with a smoke-free ordinance in place. 
  • Today, New York City’s hospitality workers are doing exceptionally well despite claims that the smoke-free law would have a negative impact.  Between March 2003 and December 2003, New York City reported 10,600 new jobs in its bars and restaurants.31    In fact, despite the city’s post-9/11 hardship, 164,000 workers are employed in the city’s bars and restaurants—the highest number recorded in the last 10 years. 
  • The number of people employed in Florida’s drinking and eating establishments increased by 4.53 percent after the smoke-free law went into place. 30

 

FACT: Smoke-Free Laws Do NOT Reduce Tourism

 

  • Several, studies have shown that smoke-free policies do not affect tourism or hotel/motel revenues.32 ,33 ,34 , 35 , 36
  • One study found that smoke-free laws were associated with increased hotel revenues in four localities: Los Angeles, California, New York City, New York, Mesa, Arizona, and the state of Utah.37   
  • Another study found that the number of tourists that visited California and New York also increased after the implementation of these states’ smoke-free policies. The study also looked at seven other localities and observed no significant changes in tourist rates following the implementation of smoke-free policies.38
  • The state of Florida, known for its world-class theme and amusement parks, implemented its smoke-free law on July 1, 2003.  The law prohibits smoking in most of the state’s enclosed workplaces.  Approximately one year after the smoking ban went into effect, researchers found that there was no significant change in the number of recreational admissions across the state.  Moreover, the number of people employed in the leisure and hospitality industry increased almost two percent during the year the ban was in place.39  

 

FACT: Smoke-Free Laws Save Businesses Money

  • Allowing smoking in the workplace increased business owners’ costs by $1,300 per year per smoking employee.40  
  • Smoking employees have significantly higher absentee, injury, accident, and disciplinary rates than their non-smoking colleagues.41 , 42 , 43 , 44
  • Some business owners have been found liable in lawsuits filed by sick employees seeking damages related to smoking in the workplace.45 ,46 ,47 ,48 ,49
  • By allowing smoking in the workplace, business owners increase their costs of doing business: Employers pay increased health, life, and fire insurance premiums, make higher workers’ compensation payments, incur higher worker absenteeism, and settle for lower work productivity.50 ,51 ,52 ,53 , 54 , 55 , 56 , 57

 

 

 

Impact of Clean Indoor Air Ordinances on Restaurant Revenues in Four Texas Cities: Arlington, Austin, Plano and Wichita Falls, (1987-1999) James A. Hayslett, PharmD, MPH and Philip P. Huang, MD, MPH, Bureau of Chronic Disease, Injury and Tobacco Prevention, Texas Department of Health. March 21, 2000.
Glantz, S.A. and L.R.A. Smith (1997).  The Effect of Ordinances Requiring Smoke-Free Restaurants and Bars on Revenues: A Follow-Up.  American Journal of Public Health (87)10: 1687- 1692.

Glantz, S.A.  and L.R.A. Smith (1994).  The Effect of Ordinances Requiring Smoke-Free Restaurants on Restaurant Sales.  American Journal of Public Health (84)7: 1081-1085.

Glantz, S.A. and L.R.A. Smith (1997).  The Effect of Ordinances Requiring Smoke-Free Restaurants and Bars on Revenues: A Follow-Up.  American Journal of Public Health (87)10: 1687- 1692.

Hyland, A., K.M. Cummings, and E. Nauenberg (1999).  Analysis of Taxable Sales Recipts: Was New York City’s Smoke-Free Air Act Bad for Restaurant Business?  Journal of Public Health Management Practice 5(1): 14-21.

Hyland, A. and K.M. Cummings (1999).  Restaurateur Reports of the Economic Impact of the New York City Smoke-Free Air Act.  Journal of Public Health Management Practice 5(1): 37-42.

Bartosch, W.J. and G.C. Pope (2002).  Economic Effect of Restaurant Smoking Restrictions on Restaurant Business in Massachusetts, 1992-1998.  Tobacco Control 11(Suppl II): ii38-ii42.

Bartosch, W.J. and G.C. Pope (1999).  The Economic Effect of Smoke-Free Restaurant Policies on Restaurant Business in Massachusetts.  Journal of Public Health Management Practice 5(1): 53-62.

Connolly, G.N., et al. (2005).  Evaluation of the Massachusetts Smoke-Free Workplace Law: A Preliminary Report.  Paper presented to the Harvard School of Public Health Tobacco Control Working Group, Boston, MA.

Huang, P., et al. (1995).  Assessment of the Impact of a 100% Smoke-Free Ordinance on Restaurant Sales—West Lake Hills, Texas, 1992-1994.  Morbidity and Mortality Weekly Report 44(19): 370-372.

Hayslett, J.A. and P. Huang (2000).  Impact of Clean Indoor Air Ordinances on Restaurant Revenues in Four Texas Cities: Arlington, Austin, Piano and Wichita Falls 1987-1999.  Texas Department of Health, Bureau of Disease, Injury and Tobacco Prevention.

Centers for Disease Control and Prevention (CDC) (2004).  Impact of a Smoking Ban on Restaurant and Bar Revenues—El Paso, Texas, 2002.  Morbidity and Mortality Weekly Report 53(7): 150-152.

Sciacca, J.P. and M.I. Ratliff (1998).  Prohibiting Smoking in Restaurants: Effects on Restaurant Sales.  American Journal of Health Promotion 12(3): 176-184.

Styring, III, W. (2001).  A Study of the Fort Wayne Restaurant Smoking Ban: Has It Impacted the Restaurant Business?  Indianapolis: Hudson Institute.

Dresser, L. (1999).  Clearing the Air: the Effect of Smokefree Ordinances on Restaurant Revenues in Dane County.  Madison: Tobacco-Free Wisconsin Coalition.

Dai, Chifeng, et al. (2004).  The Economic Impact of Florida’s Smoke-Free Workplace Law.  Gainesville, Florida: University of Florida, Warrington College of Business Administration, Bureau of Economic and Business Research.

Evans, W.N. and Andrew Hyland (2004).  [The Impact of the Montgomery County Smoke-Free Restaurant Ordinance on Restaurant Sales and Employment].  Unpublished raw data.

Hahn, E.J., et al. (2005).  Economic Impact of Lexington’s Smoke-Free Law: A Progress Report.  Lexington, Kentucky: University of Kentucky, College of Nursing and Gatton College of Business and Economics.

Goldstein, A.O. and Sobel, R.A. (1998).  Environmental Tobacco Smoke Regulations Have Not Hurt Restaurant Sales in North Carolina.  North Carolina Medical Journal.  (59)5: 284-287.

Glantz, S.A. (2000).  Effect of Smokefree Bar Law on Bar Revenues in California.  Tobacco Control 9(Spring): 111-112.

Bartosch, W.J. and G.C. Pope (1999). 

Connolly, G.N., et al. (2005).

Dresser, J., S. Boles, E. Lichtenstein, and L. Strycker (1999).  Multiple Impacts of a Bar Smoking Prohibition Ordinance in Corvallis, Oregon.  Eugene: Pacifica Research Institute.

CDC (2004).  Impact of a Smoking Ban on Restaurant and Bar Revenues—El Paso, Texas, 2002.  Morbidity and Mortality Weekly Report 53(7): 150-152.

New York City Department of Finance, et al. (2004).

Dai, Chifeng, et al. (2004). 

Evans, W.N. and Andrew Hyland (2004).

Hahn, E.J., et al. (2005).

Dunham, J. and M.L. Marlow (2000).  Smoking Laws and Their Differential Effects on Restaurants, Bars, and Tavers.  Contemporary Economic Policy (18)3: 326-333.

CDC (2004).  Impact of a Smoking Ban on Restaurant and Bar Revenues—El Paso, Texas, 2002.  Morbidity and Mortality Weekly Report 53(7): 150-152.

Dai, Chifeng, et al. (2004).

New York City Department of Finance, et al. (2004).

Glantz, S.A. and A. Charlesworth (1999).  Tourism and Hotel Revenues Before and After Passage of Smoke-Free Restaurant Ordinances.  Journal of the American Medical Association 281(20): 1911-1918.

Sciacca, J.P. and M.I. Ratliff (1998).  Prohibiting Smoking in Restaurants: Effects on Restaurant Sales.  American Journal of Health Promotion 12(3): 176-184.

Hyland, A., K.M. Cummings, and E. Nauenberg (1999).  Analysis of Taxable Sales Recipts: Was New York City’s Smoke-Free Air Act Bad for Restaurant Business?  Journal of Public Health Management Practice 5(1): 14-21.

Dai, Chifeng, et al. (2004).

Hahn, E.J., et al. (2005).

Glantz, S.A. and A. Charlesworth (1999). 

Ibid.

Dai, Chifeng, et al. (2004).

U.S. Department of Health and Human Services, CDC, Office of Smoking and Health (OSH), Wellness Councils of America, American Cancer Society (1996).  Making Your Workplace Smokefree: A Decision Maker’s Guide.  Available online at http://www.cdc.gov/tobacco/research_data/environmental/fullguide.pdf.

Halpern, M.T., Shikiar, R., Rentz, A.M., and Khan, Z.M. (2001).  Impact of Smoking Status on Workplace Absenteeism and Productivity.  Tobacco Control 10:233-238.

Ryan, J., Zwerling, C., and Orav, E.D. (1992).  American Journal of Public Health 82(1): 29-32.

Ryan, J. Zwerling, C., and Jones, M.  (1996) Cigarette Smoking at Hire as a Predictor of Employment Outcome.  JOEM 38(9): 928-933.

Penner, M. and Penner, S. (1990).  Excess Insured Health Care Costs from Tobacco-Using Employees in a Large Group Plan.  Journal of Occupation Medicine 32(6): 521-523.

Uhbi v. State Compensation Insurance Fund  (CA, 1990).

Magaw v. Middletown Board of Education (NJ, 1998).

Shimp v. New Jersey Bell (NJ, 1976).

Smith v. Western Electric Co. (MO, 1982).

McCarthy v. Department of Social and Health Services (WA, 1988).

Kristein, M.M. (1983).  How Much Can Business Expect to Profit from Smoking Cessation?  Preventive Medicine.  12:358-381.

Marion Merrell Dow, Inc. (1991).  The Economic Impact of Smoking: In the Workplace; On Cardiovascular Health; On Wound Health and Recovery from Surgery; On Infants and Children; On Pulmonary Health; On Dental and Oral Health.  Medical Information Services, Inc.

U.S. Department of Health and Human Services, et al. (1996). 

Musich, S., D. Napier, and D.W. Edington (2001).  The Association of Health Risks With Workers’ Compensation Costs.  Journal of Occupational and Environmental Medicine 43(6): 534-541.

Halpern et al. (2001).

Ryan et al. (1992).

Ryan et al. (1996).

Penner & Penner (1990).

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