January 19, 2011 -
In the debate about laws regulating smoking in restaurants and pubs, there has been some controversy as to whether smoke-free laws would reduce revenues in the hospitality industry. Norway presents an interesting case for three reasons. First, it was among the first countries to implement smoke-free laws, so it is possible to assess the long-term effects. Second, it has a cold climate so if there is a negative effect on revenue one would expect to find it in Norway. Third, the data from Norway are detailed enough to distinguish between revenue from pubs and restaurants. Autoregressive integrated moving average (ARIMA) intervention analysis of bi-monthly observations of revenues in restaurants and pubs show that the law did not have a statistically significant long-term effect on revenue in restaurants or on restaurant revenue as a share of personal consumption. Similar analysis for pubs shows that there was no significant long-run effect on pub revenue.
Our results indicate that smoke-free laws do not affect restaurant revenue directly or as a share of private consumption even in a country known for its harsh climate. There is some evidence for a short-run effect on pub revenue as a share of private consumption, but there is no evidence of a short-run effect on the absolute level of pub revenue and no evidence for a long-run effect using either measure.
PAPER: Do smoke-free laws affect revenues in pubs and restaurants? Hans Olav Melberg and Karl E. Lund, The European Journal of Health Economics, Online First™, 19 November 2010 ABSTRACT.., FULL TEXT..
Going smokefree does not damage profits, global report shows Thursday 2 June 2005, Cancer Research UK Press Release..
SMOKE-FREE LAWS HELP THE ECONOMY AND DO NOT HARM THE HOSPITALITY INDUSTRY