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Smoke‐free Ordinances Increase Restaurant Profit and Value
Author(s) -
Alamar Benjamin C.,
Glantz Stanton A.
Publication year - 2004
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1093/cep/byh038
Subject(s) - profitability index , smoke , jurisdiction , profit (economics) , economics , business , law , agricultural economics , microeconomics , finance , physics , meteorology , political science
This study estimates the value added to a restaurant by a smoke‐free policy using regression analysis of the purchase price of restaurants as a function of the presence of a smoke‐free law and other control variables. There was a median increase of 16% (interquartile range 11% to 25%) in the sale price of a restaurant in a jurisdiction with a smoke‐free law compared to a comparable restaurant in a community without such a law. This result indicates that contrary to claims made by opponents of smoke‐free laws, these laws are associated with an increase in restaurant profitability. (JEL I120 , H000 , D780 )