Economic effect of restaurant smoking restrictions on restaurant business in Massachusetts, 1992 to 1998

To determine if restaurant business declines or improves after the implementation of restrictive restaurant smoking policies.

Analysis used a pre/post-quasi-experimental design that compared town meals tax receipts before and after the imposition of highly restrictive restaurant smoking policies in adopting versus non-adopting communities. The effect of restaurant smoking policies was estimated using a fixed effects regression model, entering a panel of 84 months of data for the 239 towns in the study. A separate model estimated the effect of restaurant smoking policies on establishments that served alcohol.

Change in the trend in meals tax revenue (adjusted for population) following the implementation of highly restrictive restaurant smoking policies.

The local adoption of restrictive restaurant smoking policies did not lead to a measurable deviation from the strong positive trend in revenue between 1992 and 1998 that restaurants in Massachusetts experienced. Controlling for other less restrictive restaurant smoking policies did not change this finding. Similar results were found for only those establishments that served alcoholic beverages.

Highly restrictive restaurant smoking policies do not have a significant effect on a community's level of meal receipts, indicating that claims of community wide restaurant business decline under such policies are unwarranted.