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CALPOT-YCaliforniaPolytechnicStateUniversitySanLuis Obispo,CA93407,,uou,?{t-^'?rff'f'frBHit?i}'-,*r,http://wrvw.cob.calpoly.edu/

June23,2009To Whom t MayConcern:I havebeen asked o provide input into the discussionofthe economiceffectsof a smokingban inSt. Louis City. I provide this letter without compensation nd have no stake n whetheror not yourcommunityapprovesa ban. I am a non-smokingacademiceconomistwho has publishedeightarticlesonthe economics f smokingbans n refereed cademicournals(listedat endof letter).My studieshave ocusedon two broad ssues: 1) how privateowilers of restaurants ndbars dealwith smoking and nonsmokingcustomersand(2) how smokingbansaffect businessowners. Thefollowingbriefly listsa summaryof my researchindings.e Owners with more smoking customersexperience ossesmore often than those with fewsmoking customers.Effects me differential in the sensehat somebusinesses re harmed.somegain,andstill othersare unaffected.Thus, t makesno economicsenseo argue hat allbusinessesithergainor suffer no lossesolthough his is exactly what someban advocatessuggest.I A large empirical literature reportsthat bans exert no adverseeffects on owners,or evenraise profits. These studiesare mostly conductedby non-economistsand employ a faultymethodology hat cannotpossiblyaddress he critical researchquestion:how many ownersgair; loseor are unaffected? hey use a 'community effects'methodologyhat aggxegatesall businessesnto one numberand then examineswhether he aggregate hangesollowinga ban. This method s like looking at a classroom f 30 students, ndafter observing hataverageweight is 160poundso oncluding hat no changesoccurredover the following ten

yearsbecauseaverageweight remained160pounds.Meanwhile, somestudentsganed 20pounds,some ost 10pounds,and still othersexhibitedno change.This is not a meaningfulanalysis, but nonethelesss employed in most studiesthat conclude that bans harm noowners.r Ownersadjustprices,wages,hoursof operationand otherbusinessattributes n responseobansand so bansalso affect customersandworkers.Therefore,a focuson how bansaffectrevenues, employment or other aggregateddata does not provide a comprehensiveunderstandingf economiceffects.r Smokingbansare not fully enforced and compliance s inverselyrelatedto degreeof harmimposedon owners.Noncompliances perhapshe best ndicatorof economicharmsinceotherwiseowners haveeconomic ncentives o enforcebans.o Bars experienceharm much more often than restaurantsbecausehey cater more to socialinteractions betweensmoking and non-smoking patrons. It is therefore inappropriate topredict economic effects on bars fiom studies that examine effects on restaurants(orcombinerestaurants ndbars).r Bans are mostly adopted in jurisdictions with fewer smokers,so jurisdictions that bansmokingexperienceessharmthan if banswere forcedon urisdictions with more smokers.Early studies f smokingbans ocused n urisdictionswith relatively ew smokers nd hus

The California State University , Bakerefield. Chamellslands. Chico. DominguezHills. Fresno. Fullerton. Hayvard. Humboldt'LongBeach'LosAngeles'MaritimeAcademy'MontereyBay.Northtidge.Pomom.Sacnmento.SanBemardino.SanDiego.SanFnncisco.SmJme.SanluisObispo'SanMarcm'Sononn'Stanislau

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2tended to show relatively little economic harm. These studies do not provide usefulpredictions or imposingbans n communitieswith relatively manysmokers.

I would be happy o conduct research or you irrwhich I moreclearly review the evidence rom themany studies of smoking bans with special attention given to St. Louis City. I would also beavailable o conducta detailedstatisticalanalysis hat is basedon a statisticallysignificant samplingof your businesses o that you can better understandwhat fraction of your businessownerswouldbe harmed by a smoking ban. It would appear easonableo expectthat sucha study would frndrates of harmabove he nationalaveragegiven that your communityhas a relatively high smoking' prevalence.Sincerely,t\7. /),v/ I ytMichaelL. Marloq Ph.D.Professorof Economicsand DistinguishedScholarCaliforniaPo$echnic StateUniversitySanLuis Obispo,CA93407mmarlow@calpoly.edu

RefereedPubliqationsby Miqhael L. Ma{low on SmqkiqgBanl"EpidemiologicandEconomicResearch,nd heQuestionof SmokingBans,o'Jp.lrnal f Ar-nericanPh),sicians ndSurgggns,Summer2009."The EconomicEffects of SmokingBans on Restaurants nd Pubs n the UK," (with Barrie Craven)EconomicAffairs December 008."Honestly,Who Else Would Fund SuchResearch? eflectionsof a Non-SmokingScholar,"EoonJournalWptch.5 (2), pp. 240-268,2048."The PrivateMarket for Accomrnodationo"Eq*ern EconomicJournal(with JohnDunham) 30:377-91, Summer 004.

'"TheEconomic ncidenceof SmokingRestrictions,"AppliedEconomicswith JohnDunham),35:193 -1942,December 003."The Differential Effects of SmokingLaws on Restaurants, &rs and Taverns," 18: 326-333,Conte{nporaryEgonor,nic olicy, July 2000(with John Dunham)."smoking Laws and the Allocation of Restaurant ndBar Seating,"Ecofrpmic nqpiry January2000:38: 151-157.withJohnDunham).

"smoking Bans and he CoaseTheorem,"Briefing Notes n Economips,May 1997, with WilliamJ. Boyes).