Smoking-ban Activists Using Bad Economics?

Economist Challenges Leading Anti-Smoking Advocates in Econ Journal Watch

(Fairfax, Virginia) In the latest issue of Econ Journal Watch, economist David Henderson dissects and rejects the claims of anti-tobacco researchers Benjamin Alamar and Stanton Glantz that smoking-bans are good for the restaurant business. Henderson writes that their article is “bad economics.” Yet the article in question won an award as the best article in the scholarly journal Contemporary Economic Policy in 2004.

Henderson writes that the article “shows unsound reasoning, presents empirical findings that do not lead to the authors’ conclusions, and omits important considerations.”

Contrary to what the article finds, Henderson contends that there is “strong reason to believe that a law banning smoking would reduce the profits (and resale value) of restaurants that otherwise would have allowed smoking.”

Alamar and Glantz fire back in the same issue of Econ Journal Watch, writing, “Henderson does not accurately identify any problems either theoretically or statistically with our analysis. His criticism of our work is based on extreme interpretations of economic theory and an incomplete knowledge of the previous literature on the subject.”

Henderson, a professor at the Naval Postgraduate School in Monterey, CA, argues that a law which prevents a business from providing a service usually damages that business as well as the customers who enjoy that service – in this case, being allowed to smoke. Henderson reasons that if a restaurant would gain from disallowing smoking, then it would place its own house restrictions on smoking—a general ban would not be necessary.

Alamar and Glantz contend that restaurant owners have been duped by the tobacco industry to believe that disallowing smoking would be bad for business. In fact, they contend, disallowing smoking would be good for business. Since the tobacco industry misleads the hospitality industry, they argue that a government ban is needed.

Henderson doubts that restaurant owners are so gullible. Moreover, he asks: If Alamar and Glantz have evidence that disallowing smoking would improve their business, why not simply try to “enlighten the unenlightened?” Why push for a coercive government ban?

Alamar and Glantz reiterate their findings,“The bottom line is that the implementation of a smokefree law to protect the public from the dangers of secondhand smoke increased restaurant values by a median of 16%. This result is consistent with all other literature on the subject that has not been funded by the tobacco industry.”

Alamar and Glantz’s work has been used to argue for smoking bans across the country including in Ohio and New York City. The September issue of Econ Journal Watch is available at EconJournalWatch.org.