Restaurant owner perceptions of the effects of a smoking ban

Abstract

In this paper business owner expectations regarding revenue changes due to a general smoking ban are analyzed using a survey mailed out to all restaurants, bars, cafés and nightclubs in Gothenburg, Sweden. A reasonable interpretation of the survey responses is that as many as 74% of the establishments do not expect to be severely hurt by a general smoking ban applying to the entire restaurant sector. The econometric results show that the owners are more likely to expect a decrease in revenues the larger their share of smoking customers. Moreover, establishments that are smoke-free are less likely to expect negative economic effects compared to those that currently allow smoking. Also, establishments with a non-smoking section are less likely to expect negative economic effects from a general smoking ban. No strong effect of the type of establishment (café, bar, or restaurant) on expected changes in revenues is detected, although establishments with late night hours are more likely to expect financial losses.