Impact of Non-Smoking Ordinances on Hospitality Revenues: The Case of Germany

Abstract

Impact of non-smoking ordinances on hospitality revenues: The case of Germany regression and difference-in-difference strategies, we find negative impact limited to bars in the very short run. If any, there is a positive impact on total expenditures in the long run, indicating that either consumption pattern has not changed at all or that any reduction in spending by smokers is compensated for by a corresponding increase by non-smokers. These findings support the German -and similar -non-smoking legislations in the sense that positive externalities resulting from reduced health care cost are likely to outweigh the risk to businesses in the hospitality sector, at least in the long run.

Public Smoking Bans, Youth Access Laws, and Cigarette Sales at Vending Machines

“…The magnitude of the estimated effect in bars (-15%), however, is rather moderate, which suggests that any adverse consequences for revenues and profits of these businesses are likely to have been rather limited. This reading of this result is consistent with the findings of Ahlfeldt and Maenning (2009) and Kvasnicka and Tauchmann (2010) who studied sales data of the hospitality industry in Germany.…”

Tobacco and alcohol: complements or substitutes?

“…Here Jimenez and Labeaga (1994), Decker and Schwartz (2000), Cameron and Williams (2001), Zhao and Harris (2004), and Picone et al (2004) 2 may serve as representative examples of the respec-1 Focussing on revenues of pubs and bars as a rough measure of alcohol consumption, recent empirical evidence for Germany does not point at any significant impact of smoking bans on drinking (Ahlfeldt and Maenning, 2010) or finds just a small decreasing effect on alcohol consumption (Kvasnicka and Tauchmann, 2012). Yet, by completely ignoring home consumption, these analyses might provide a rather incomplete picture.…”

Much ado about nothing? Smoking bans and Germany's hospitality industry

“…Yet, as of now, there is still little evidence for European countries, which only recently enacted public smoking bans. Two notable exceptions are Adda et al (2007) 3 and Ahlfeldt and Maenning (2009). The latter study is closely related to the present analysis, as it also focuses on Germany and uses similar data to ours.…”

“…The latter study is closely related to the present analysis, as it also focuses on Germany and uses similar data to ours. However, the scope of the present paper goes beyond the work of Ahlfeldt and Maenning (2009), as we also consider various exemptions to state smoking bans, the importance of pre-announced delayed enforcements of bans, as well as potential effects not just on sales but also on business openings and start ups.…”