The Impact of Smoke Free Air Ordinances in Texas
Lead investigators: Silda Nikaj, Joshua Miller (HUD) and John Tauras (University of Illinois at Chicago)
Do Texas cities that ban smoking in bars and restaurant suffer due to loss in tax revenue? We use aggregate and establishment level data from Texas and exploit a series of experiments that rendered bars and restaurants smoke free at different times, to determine the impact of ordinances on bar and restaurant sales. We find that such laws do not affect bar and restaurant sales, nor do they adversely impact alcohol tax revenue. Our aggregate results suggest no short-term or long-term impacts due to smoke free ordinances, while, our results from alcohol sales tax revenue at the establishment level suggest that bars and restaurants would see higher alcohol sales due to banning smoking on premises in the long term. We examine if there is a first mover advantage in adopting smoking bans, and find no evidence that this is the case. In fact, our findings suggest that among cities that adopted such ordinances at a later date, there is an increase in revenue generated by alcohol sales due to smoke free policies.