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St. Louis Public Radio News
(2008-01-24)
ST. LOUIS, MO
(St. Louis Public Radio) -
An economist with the Federal Reserve Bank in St. Louis says that the economic impact of smoking bans may be more significant than previously thought.Illinois implemented statewide ban in bars, restaurants and public buildings starting this month. St. Louis County rejected a county-wide ban in 2006.
Michael Pakko published an article on the subject in the quarterly economic journal, "Regional Economist".
In his research Pakko found that statewide bans like the one recently passed in Illinois, and city bans like the one in Columbia, Missouri, are both likely to decrease revenue.
"Bars are by far more affected than restaurants and the effect on restaurants depend on a number of factors including climate and whether there is a high prevalence of smokers in the community to begin with."
According to data from the Bureau of Labor Statistics, Pakko says bars typically see losses ranging from four to sixteen percent of revenue.
His article referenced data from Columbia, Missouri, which passed a smoking ban in January of last year.
"In trying to identify the effect of the smoking ban, I've found that there has been about a five-percent decline in sales tax revenues in Columbia over the first seven months of the year, which is tantamount to looking at total revenues."
Pakko notes that casinos are another case where smoking bans have a negative impact on revenue, particularly when a neighboring state does not have a ban on smoking.
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