{'fraction_non_alphanumeric': 0.02097902097902098, 'fraction_numerical': 0.002797202797202797, 'mean_word_length': 5.423652694610778, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
The effects of smoking laws on seating allocations of restaurants, bars, and taverns

MICHAEL L. MARLOW [*] Supporters of smoking laws often argue that they do not harm restaurants, bars, and taverns and may even raise their profits. Opponents argue that owners cater to customer preferences regarding smoking and that laws mandating specific smoking policies will therefore negatively impact profits of some firms. This article tests hypotheses regarding how smoking laws affect seating allocations, using data from a nationwide survey of restaurant and bar owners. The empirical evidence indicates that smoking laws exert no significant effect on seating allocations. Firms are shown to allocate greater shares of seating to nonsmoking use when customers exhibit stronger preferences for such seating. (JEL K2, H0) I. INTRODUCTION Laws restricting smoking in restaurants have been enacted in 32 states. Supporters of these laws often argue that they do not harm firms and may even raise their profits. [1] Recent studies, for instance, argue that outright bans on smoking in eating and drinking places have not adversely affected these establishments, suggesting that smoking bans either do not reduce demand or lower costs for firms, which offsets sales losses, thus leading to no adverse changes in profits. Opponents of smoking restrictions argue that owners cater to customer preferences regarding smoking. Some owners would find it profitable to allow smoking throughout their establishments, others to forbid all smoking, and still others to accommodate both smokers and nonsmokers by investing in partitions, designating areas, creating smoking patios or rooms, and/or investing in air filtration systems. They argue that laws that mandate specific smoking policies will therefore negatively impact profits of some firms. Little economic research has been published on the effects of smoking laws on revenues of restaurants, bars, and taverns, and none has been directed toward the issue of smoking/nonsmoking seating allocations. [2] This article provides a framework for examining how customer preferences influence smoking and nonsmoking seating allocations by owners--the primary policy that firms unilaterally adopt in their attempts to deal with the issue. Hypotheses regarding how smoking laws affect seating allocations are then tested using data from a nationwide survey of 1,300 restaurant, bar, and tavern owners. The empirical evidence indicates that smoking laws exert no significant effect on seating allocations. II. ECONOMIC MODEL AND TESTABLE HYPOTHESES Without legal restrictions, policies adopted by restaurants, bars, and taverns toward smoking are determined in much the same manner as decisions regarding menus, prices, and hours of operation. Profit-maximizing firms optimize on the basis of customer demand and costs. Decisions pertaining to smoking policies simply allocate the air space within firms between smoking and nonsmoking customers. [3] The air space within an establishment is considered just like any other resource, and owners decide to cater solely to smokers, to nonsmokers, or to both by providing patrons with rights to smoke while accommodating others through smoking/nonsmoking areas and air filtration systems. The choice depends on customer preferences and relative marginal costs. [4] Predictably, market segmentation naturally evolves where firms cater more to smokers in markets dominated by smokers than in those markets dominated by nonsmokers. There may also be broad differences between how owners of restaurants and bars or taverns allocate seating. Customers of restaurants are likely to prefer that owners adopt different accommodation strategies than would patrons of bars and taverns. Restaurant customers tend to dine in one location within firms, and therefore it is possible for owners to designate sections for smokers and nonsmokers, and this predictably leads to a relatively high allocation of nonsmoking seating. In contrast, customers of bars and taverns may prefer to participate in various activities (dining, drinking, listening to music, dancing, and playing pool, darts, and billiards) whereby they move to different locations within the establishment during their visit and interact with different patrons. …