The economic impact of Mexico City's smoke-free law

Tob Control. 2011 Jul;20(4):273-8. doi: 10.1136/tc.2010.036467. Epub 2011 Feb 3.

Abstract

Objective: To evaluate the economic impact of Mexico City's 2008 smoke-free law--The Non-Smokers' Health Protection Law on restaurants, bars and nightclubs.

Material and methods: We used the Monthly Services Survey of businesses from January 2005 to April 2009--with revenues, employment and payments to employees as the principal outcomes. The results are estimated using a differences-in-differences regression model with fixed effects. The states of Jalisco, Nuevo León and México, where the law was not in effect, serve as a counterfactual comparison group.

Results: In restaurants, after accounting for observable factors and the fixed effects, there was a 24.8% increase in restaurants' revenue associated with the smoke-free law. This difference is not statistically significant but shows that, on average, restaurants did not suffer economically as a result of the law. Total wages increased by 28.2% and employment increased by 16.2%. In nightclubs, bars and taverns there was a decrease of 1.5% in revenues and an increase of 0.1% and 3.0%, respectively, in wages and employment. None of these effects are statistically significant in multivariate analysis.

Conclusions: There is no statistically significant evidence that the Mexico City smoke-free law had a negative impact on restaurants' income, employees' wages and levels of employment. On the contrary, the results show a positive, though statistically non-significant, impact of the law on most of these outcomes. Mexico City's experience suggests that smoke-free laws in Mexico and elsewhere will not hurt economic productivity in the restaurant and bar industries.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Commerce / economics*
  • Commerce / statistics & numerical data
  • Commerce / trends
  • Health Policy / economics
  • Health Policy / legislation & jurisprudence
  • Humans
  • Income / statistics & numerical data
  • Income / trends
  • Mexico
  • Restaurants / economics
  • Restaurants / legislation & jurisprudence
  • Smoking / legislation & jurisprudence*
  • Smoking Prevention
  • Tobacco Smoke Pollution / legislation & jurisprudence*
  • Tobacco Smoke Pollution / prevention & control

Substances

  • Tobacco Smoke Pollution