Effects of clean indoor air laws on bar and restaurant revenue in Minnesota cities

Abstract

Background: In recent years, local governments have strengthened laws to prohibit smoking in bars and restaurants to promote patron and employee health. Because of concerns that clean indoor air policies could have negative economic effects on some hospitality businesses, some cities have adopted partial clean indoor air policies (e.g., exempting bars).

Purpose: This paper considers how partial and comprehensive smokefree policies affected bar and restaurant revenue, using quarterly data reported to the Minnesota Department of Revenue.

Methods: Data from ten Minnesota cities from 2003 to 2007 were used to conduct a time-series analysis in 2009, adjusting for the population size of each city.

Results: Bars and restaurants governed by either partial or comprehensive policies had slightly higher revenues than those not regulated by any local clean indoor air policy. Bars and restaurants governed by partial local bans reported 0.009% higher total revenue (p = 0.5) and 0.052% higher liquor sales revenue (p = 0.003) than those not covered by a ban. Bars and restaurants governed by comprehensive local bans reported 0.026% higher total revenue (p = 0.05) and 0.018% higher liquor sales revenue (p = 0.35).

Conclusions: These findings suggest that smoking bans, whether comprehensive or partial, do not have a negative effect on bar and restaurant total or liquor revenues and may be associated with slightly higher revenue compared to not having a clean indoor air policy.