Economic effect of smoke-free ordinances on 11 Missouri cities

The harmful effects of secondhand smoke are convincing more and more communities across the United States and the world to prohibit smoking in public places, especially in eating and drinking establishments. A 1993 Missouri state law allows smoking in designated areas in indoor public places such as restaurants and bars. Consequently, some Missouri communities have adopted local ordinances that prohibit smoking in all indoor workplaces, including restaurants and bars. We used an objective measure of economic activity, the taxable sales revenues of eating and drinking establishments, to empirically examine the economic effect of smoke-free ordinances.

We studied the economic effect of smoke-free ordinances in 11 Missouri cities using multivariate log-linear regression models with log-transformed taxable sales revenues of eating and drinking establishments as the dependent variable and the smoke-free ordinance as the independent variable, while controlling for seasonality, economic condition and unemployment. We used data from 20 quarters before the smoke-free ordinances and at least 10 quarters after the smoke-free ordinances for all cities. The null hypothesis of no effect of smoke-free ordinance on taxable sales of the eating and drinking establishments was tested.

Eight of the 11 cities had increased taxable sales for eating and drinking establishments postordinance. The remaining 3 experienced no change.

The findings of our study are consistent with findings from most published economic studies that a smoke-free ordinance does not harm a local economy.