Business Is Not Going Up in Smoke
Forget everything you've heard: The smoking ban of 2006 isn't having a detrimental effect on business owners.
A preliminary analysis of key economic indicators before and after passage of the Nevada Clean Indoor Air Act reveals that the negative economic trends began prior to the act's passage or that they are consistent with downward trends in other segments of the economy not affected by the smoking ban.
The act prohibits smoking in all indoor spaces in Nevada with the exception of areas typically off limits to children, such as casino gaming areas.
UNLV researchers tracked data from 1999 through the first quarter of 2009, taking into account seasonal effects and general economic trends. They found:
Restaurant and Bar Employment
- Six of seven employment sectors evaluated started showing declines in the second quarter of 2006, before the smoking ban was passed.
- Employment in these sectors rose in early 2008, despite a drop in overall employment linked to the ongoing economic recession.
New Business Openings
- The number of newly opened drinking establishments increased quarterly from the time the clean air act went into effect until the second quarter of 2008.
- The number of newly opened restaurants dropped in the second quarter of 2007, but has been on the rise since that time.
Taxable Sales in Bars and Restaurants; Food and Beverage Stores
- Taxable sales in bars and restaurants declined in the two quarters before the act passed and followed countywide taxable sales trends in 2007 and 2008.
- Taxable sales in food and beverage stores did not decline until the third quarter of 2007.
Slot Machine Revenue and Collections
- Slot revenue dropped immediately after the ban went into effect in January 2007, but rebounded by the second quarter of 2007.
- Slot revenue is consistent with general downward trends in total gross gaming revenue and games and table revenue, all of which have been in decline since the third quarter of 2007.
- Slot collections (fees each business pays for housing slot machines) in affected businesses followed trends of slot collections in non-affected businesses through the second quarter of 2008.
Consistent Findings
The findings are consistent with similar independent economic studies in Massachusetts and New York within the last five years. Those studies also show little or no statistically significant downward trends after passage of smoke-free legislation.
Researchers are currently working with the U.S. District Court in Nevada to examine restaurant and bar bankruptcies beginning in 1999 and expect to release a full report this fall. The team also plans to begin a statewide economic impact study of the act.
The UNLV research team includes:
- Nancy York, professor of nursing
- Chris Cochran and Jay Shen, professors of health care administration and policy
- Keith Schwer, director of the Center for Business and Economic Research
Maria Azzarelli and Deborah Williams of the Southern Nevada Health District also assisted in the study. The study was funded through a UNLV President's Research Award.
Related Information
Las Vegas Sun article
Las Vegas Review-Journal article
UNLV Magazine story
