[C-U Smokefree] No impact on restrnt/bar revenue

Theotskl at aol.com Theotskl at aol.com
Sat Feb 28 15:44:49 CST 2004


Hi all--

the material below is FYI.

There are no negative statistically significant impacts on revenue from bars 
and restaurants after the implementation of smoke-free restaurants in El Paso 
Texas.  Opponents and skeptics of smoke free ordinance efforts in the 
Champaign Urbana must be challenged, must be challenged to produce the data and 
evidence, as well as the sources of such evidence and data to support either their 
opposition or their skepticism, or else, they should let those knowledgeable 
about the data and the use of  credible evidence handle things accocrdingly.  
Champaign-Urbana is an educated community and its news media, elected and civic 
leaders and policy-making folks have to live up to the  standard of acting on 
well informed and credible scientific knowledge in local decision making 
processes affecting the health and lives of over 100,000 residents in the twin 
cities community.

Link for Tables and figures:  
<http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5307a2.htm>

THT.
                    
Weekly
February 27, 2004 / 53(07);150-15 



Impact of a Smoking Ban on Restaurant and Bar Revenues --- El Paso, Texas, 
2002


Smoke-free indoor air ordinances protect employees and customers from 
secondhand smoke exposure, which is associated with increased risks for heart disease 
and lung cancer in adults and respiratory disease in children (1,2). As of 
January 2004, five states (California, Connecticut, Delaware, Maine, and New 
York) and 72 municipalities in the United States had passed laws that prohibit 
smoking in almost all workplaces, restaurants, and bars (3). On January 2, 2002, 
El Paso, Texas (2000 population: 563,662), implemented an ordinance banning 
smoking in all public places and workplaces, including restaurants and bars. 
The El Paso smoking ban is the strongest smoke-free indoor air ordinance in 
Texas and includes stipulations for enforcement of the ban by firefighting and law 
enforcement agencies, with fines of up to $500 for ordinance violations (4). 
To assess whether the El Paso smoking ban affected restaurant and bar 
revenues, the Texas Department of Health (TDH) and CDC analyzed sales tax and 
mixed-beverage tax data during the 12 years preceding and 1 year after the smoking ban 
was implemented. This report summarizes the results of that analysis, which 
determined that no statistically significant changes in restaurant and bar 
revenues occurred after the smoking ban took effect. These findings are consistent 
with those from studies of smoking bans in other U.S. cities (5--8). Local 
public health officials can use these data to support implementation of 
smoke-free environments as recommended by the Task Force on Community Preventive 
Services (9). 

To study the impact of the El Paso smoking ban on all sectors of the local 
restaurant and bar industry, TDH and CDC obtained quarterly sales tax reports 
and monthly mixed-beverage tax receipts from the Texas Comptroller of Public 
Accounts. The sales tax reports provided revenue data for restaurants, bars, and 
retail businesses, grouped by Standardized Industrial Classification (SIC) 
codes. Categories were created for restaurants (SIC codes 5812, 5816, and 5817) 
and bars (SIC codes 5813 and 5814) (10). The sales tax reports included revenue 
generated by sales of meals and sales of beer and wine for establishments 
with beer and wine retailer permits; sales tax revenue data were used for 
1990--2002. Other restaurant and bar revenue data came from reports filed by holders 
of mixed-beverage permits. The state's mixed-beverage gross receipts tax, 
enacted in 1994, is levied on revenue generated by sales of alcoholic beverages 
(e.g., liquor, beer, and wine) and nonalcoholic beverages and ice used in mixed 
drinks. Mixed-beverage revenue data were used for 1995--2002. 

Multiple linear regression analysis was used to examine the effect of the El 
Paso smoking ban on changes in revenue over time. The following independent 
variables were considered: a variable indicating whether the smoking ban was in 
force, an ordinal variable to represent secular time, and three variables to 
indicate during which one of four calendar quarters the revenue data were 
collected. Two regression models were created for each of the following primary 
dependent variables: 1) revenue subject to sales tax from all restaurants and 
bars, restaurants only, and bars only; and 2) revenue subject to the 
mixed-beverage tax. For each category, the first model examined the association between 
the smoking ban and revenue, and the second examined the association between the 
smoking ban and the fraction of revenue as a percentage of El Paso's total 
retail revenues (SIC codes 5211--5999). This fraction accounts for economic 
variation that might impact revenue in all sectors of the retail economy (6). 

Two sets of statistics were used to evaluate the quality of the models. The 
Durbin-Watson statistic was calculated for each model to determine if 
first-order autocorrelation was present. Variance inflation factors were examined to 
determine if multicollinearity was present in any of the models. 

Restaurant, bar, and mixed-beverage revenues varied by quarter; in all 
categories, revenues usually were higher during the fourth quarter 
(October--December) of each year (Figure 1). During all four quarters, bar and mixed-beverage 
revenues accounted for approximately 1% of total retail revenues (Figure 2). 

None of the regression models for restaurant, bar, or mixed-beverage revenues 
or for such revenues as percentages of total retail revenue over time showed 
any statistically significant changes after the smoking ban was implemented (
Table). In addition, the results did not change when revenues were adjusted for 
inflation, and adjusting for changes in price did not change the results (8). 
In all models, the variance inflation factors had values of <2 for each of 
the independent variables, indicating that multicollinearity was not present, 
and the Durbin-Watson statistics indicated that none of the autocorrelations was 
statistically significant (Table). 

Reported by: P Huang, MD, Texas Dept of Health. AK De, PhD, Div of Applied 
Public Health Training, Epidemiology Program Office; ME McCusker, MD, EIS 
Officer, CDC. 

Editorial Note:


No decline in total restaurant or bar revenues occurred in El Paso, Texas, 
after the city's smoking ban was implemented on January 2, 2002. These findings 
are consistent with the results of studies in other municipalities that 
determined smoke-free indoor air ordinances had no effect on restaurant revenues (2,5
--8). Despite claims that these laws especially might reduce alcoholic 
beverage revenues (2), the mixed-beverage revenue analyses indicate that sales of 
alcoholic beverages were not affected by the El Paso smoking ban. 

The findings in this report are subject to at least three limitations. First, 
because sales tax reports lag revenue collection by 6 months, sales tax data 
were available for only 1 year after the El Paso smoking ban was implemented. 
However, analyses from other cities that included data for several years after 
a smoking ban was enacted indicated no declines in restaurant or bar revenues 
(6--8). Revenue data from El Paso will be monitored for any changes in 
restaurant and bar revenues. Second, because limited revenue data for El Paso were 
available, methods that might provide better estimates of the impact of the ban 
could not be used. Regression models measuring changes in slope for revenues 
before and after implementation of smoke-free indoor air ordinances might 
provide better estimates of how these ordinances affect revenues (8); time-series 
models also might produce better estimates. When more information becomes 
available, these models should be applied to the El Paso data. Finally, because 
the SIC code--based restaurant and bar categories are not mutually exclusive, 
certain bars were included in the restaurant category created for this analysis. 
However, mixed-beverage tax data, which provide a more precise measure of 
alcohol-related revenue, support the finding that bar revenues were not affected 
by the smoking ban. 

Opponents of smoke-free indoor air ordinances have claimed that enacting 
smoke-free indoor air ordinances will harm restaurant and bar revenues (2). 
However, the findings in this report indicate that, in El Paso, Texas, restaurant 
and bar revenues were not affected by the smoking ban. Such analyses of economic 
data can provide local policymakers with statistical evidence to evaluate the 
merit of implementing smoke-free indoor air ordinances in their communities. 

Acknowledgments 

This report is based on contributions by M Boerm, P Gingiss, Univ of Houston; 
Research Div and Open Government Section, Office Texas Comptroller of Public 
Accounts. 

References
 


1.  California Environmental Protection Agency. Health effects of exposure to 
environmental tobacco smoke. Sacramento, California: California Environmental 
Protection Agency, Office of Environmental Health Hazard Assessment, 1997. 
Available at http://www.oehha.org/air/environmental_tobacco/finalets.html. 
2.  Glantz SA. Smoke-free restaurant ordinances do not affect restaurant 
business. Period [Editorial]. J Public Health Manag Pract 1999;5:vi--ix. 
3.  American Nonsmokers' Rights Foundation. Clean indoor air ordinance counts 
summary. Berkeley, California: American Nonsmokers' Rights Foundation, 2004. 
Available at http://www.no-smoke.org/mediaordlist.pdf. 
4.  Gingiss PM, Roberts-Gray C, Boerm MC, et al. Texas smoke-free municipal 
ordinance database. Houston, Texas: University of Houston, 2002. 
5.  CDC. Assessment of the impact of a 100% smoke-free ordinance on 
restaurant sales---West Lake Hills, Texas, 1992--1994. MMWR 1995; 44:370--2. 
6.  Glantz SA, Smith LR. The effect of ordinances requiring smoke-free 
restaurants and bars on revenues: a follow-up. Am J Public Health 1997;87:1687--93. 
7.  Glantz SA. Effect of smokefree bar law on bar revenues in California. Tob 
Control 2000;9:111--2. 
8.  Glantz SA, Charlesworth MA. Tourism and hotel revenues before and after 
passage of smoke-free restaurant ordinances. JAMA 1999; 281:1911--8. 
9.  Task Force on Community Preventive Services. Recommendations regarding 
interventions to reduce tobacco use and exposure to environmental tobacco smoke. 
Am J Prev Med 2001;20:10--5. 
10. Occupational Safety and Health Administration. Standard Industrial 
Classification (SIC) System Search. Washington, DC: U.S. Department of Labor, 
Occupational Safety and Health Administration, 2003. Available at 
http://www.osha.gov/oshstats/sicser.html. 





Figure 1

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Figure 2

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Table

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