Putting out Fires: An Examination of the Determinants of State Clean Indoor-Air Laws

Abstract

1. IntroductionFew products have generated as much public scrutiny as tobacco. In light of the health consequences associated with smoking, the federal government took several steps in the 1960s (such as published health warnings and restrictions on cigarette advertising) to reduce the incidence of smoking. Beginning in the 1970s, state governments began to play an increasing role in the anti-smoking campaign by adopting clean indoor-air laws, which restricted smoking in particular locations, such as restaurants, bars, and work sites.1Various studies, including Wasserman et al. (1991), Chaloupka (1992), Chaloupka and Saffer (1992), and Yurekli and Zhang (2000), generally confirmed that clean indoor-air laws are effective at reducing cigarette demand. However, the nature of the smoking restriction appears to matter. In particular, Chaloupka (1992) and Chaloupka and Saffer (1992) found that restrictions on smoking in public places reduced cigarette demand, whereas restrictions at private work sites do not significantly reduce demand.2Due to variations in antismoking laws across states, only a few studies have addressed the demand for clean indoor-air laws. In a survey of individuals from San Luis Obispo, California, for example, Boyes and Marlow (1996) found nonsmokers and women to be more supportive of a smoking ban in restaurants and bars. Alternatively, Chaloupka and Saffer (1992) used state-level data and found that differences in smoking restrictions in public places and at private work sites depend on several factors, including cigarette prices, income, tobacco production, religious affiliation, and political activity. More recently, Hersch, Del Rossi, and Viscusi (2004) found that voting preferences of state residents and the political affiliation of lawmakers were the main factors that affect whether or not a restriction is adopted at a specific location (for example, restaurants, bars, malls, enclosed arenas, and hospitals). However, smoking habits could have an effect on voting preferences; therefore, these results could show the indirect effect of tobacco consumption on smoking restrictions.There are several limitations of the existing literature that lead to a need for further analysis. First, studies have ignored the potential role of cigarette taxation as a determinant of smoking bans. For example, if states adopt a general antismoking position, taxes could be used in conjunction with smoking bans to reduce tobacco consumption. Thus, depending on the argument, states may view taxation as a policy substitute or a policy complement to clean indoor-air laws. Second, the potential endogeneity of right-hand-side variables has not been addressed. For example, tobacco consumption is often included as a determinant of smoking bans; however, tobacco consumption may potentially be endogenous. In general, studies have found that restrictions on smoking in public places reduce cigarette demand, which implies that cigarette consumption is potentially endogenous in the reverse regression of smoking on restrictions. It is unfortunate that the literature has not addressed this possibility in a systematic manner.3 Third, except for Hersch, Del Rossi, and Viscusi (2004), studies have failed to account for differences in the demand for clean indoor-air laws across different restricted locations.This study addresses these limitations by estimating the demand for clean indoor-air laws using a panel of state-level data. By using a panel data set, we were able to control for state-specific effects that made it more or less likely that a given state had a smoking ban in a particular area. Specifically, we accounted for the potential endogeneity of cigarette consumption and taxation within a random-effects Probit model of the adoption of smoking restrictions across six locations--public places, government buildings, private work sites, schools, health care facilities, and restaurants. …