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The purpose of the proposed pilot study is to determine the
differential effect of Lexington’s smoke-free law on
employment, wages, and business closures in different sizes
and types of businesses in Fayette and contiguous counties.
The long-term objective of this research is to determine the
differential effects of smoke free laws on different types
and sizes of businesses in the tobacco-producing state of
Kentucky.
Many studies dispute the misperception that smoke-free
laws adversely impact the restaurant and bar industries. New
York City’s 1995 Smoke-free Air Act had no adverse effects
on restaurant employment, and restaurant employment growth
was three times higher than the rest of the state from 1993
to 1997. In 15 cities with ordinances banning smoking
in restaurants and 15 cities without such ordinances from
1986 to 1993, smoke-free ordinances did not negatively
impact restaurant sales as indicated by sales-tax receipts.
Gross restaurant sales in Flagstaff, Arizona increased 16%
one year after a smoke-free ordinance. Similarly, studies
examining bar and tourism receipts have shown no adverse
effects of smoking ordinances on bar and tourism revenues.
The effect of smoke-free laws on different businesses by
type and size of establishment has not been examined. In
only one study, funded by the tobacco industry, bars were
more than twice as likely to experience business losses as
restaurants; however, self-report survey data from
restaurant, bar, and tavern owners were used.
We will estimate separate econometric models using
existing data over time on restaurant and bar employment and
wages, business closures, and whether the county has a
smoke-free law. We will include all Kentucky counties,
controlling for population size, tourism, and local labor
market conditions. Separate models will be estimated for
restaurants, bars, restaurant/bar combinations, fast food
establishments, and hotels/motels.
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