Why Understanding Smoking Bans is Important for Estimating Their Effects: California's Restaurant Smoking Bans and Restaurant Sales

Economic Inquiry, Vol. 46, Issue 1, pp. 60-76, January 2008

Economic Inquiry, Vol. 46, Issue 1, pp. 60-76, January 2008

17 Pages Posted: 19 Mar 2008

See all articles by Robert K. Fleck

Robert K. Fleck

Montana State University - Bozeman - Department of Agricultural Economics and Economics

F. Andrew Hanssen

Clemson University - John E. Walker Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2008-03-11

Abstract

A large literature has sought to determine whether smoking bans help or hinder restaurants. Much of the literature improperly specifies its econometric equations and thus mistakenly infers causality. Examining the relationship between restaurant smoking bans and restaurant revenues in 267 California communities, we reach two main conclusions. First, California's municipal restaurant smoking bans are endogenous in a critical way - restaurant sales growth (or something correlated with restaurant sales growth) appears to cause restaurant bans, not vice versa. Consequently, failure to control properly for trends can produce spurious evidence of causation. Second, ban heterogeneity (e.g., state versus local) can be exploited to sort out - or rule out - causal effects. In other words, pooling data and treating smoking bans implemented at different levels as homogenous (as many studies do) ignores an important source of information and is likely to lead to erroneous conclusions. Our analysis holds lessons for the many studies that have examined the arguably more important question of how smoking bans affect smoking rates.

JEL Classification: L51

Suggested Citation

Fleck, Robert K. and Hanssen, F., Why Understanding Smoking Bans is Important for Estimating Their Effects: California's Restaurant Smoking Bans and Restaurant Sales (2008-03-11). Economic Inquiry, Vol. 46, Issue 1, pp. 60-76, January 2008, Economic Inquiry, Vol. 46, Issue 1, pp. 60-76, January 2008, Available at SSRN: https://ssrn.com/abstract=1105985 or http://dx.doi.org/10.1111/j.1465-7295.2007.00080.x

Robert K. Fleck (Contact Author)

Montana State University - Bozeman - Department of Agricultural Economics and Economics ( email )

P.O. Box 172920
Bozeman, MT 59717-2920
United States
406-994-5603 (Phone)
406-994-4838 (Fax)

F. Hanssen

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
11
Abstract Views
492
PlumX Metrics