The economic impact of Mexico City's smoke-free law

• Published in: Tobacco control Vol. 20; no. 4; pp. 273 - 278
• Main Authors: Guerrero López, Carlos Manuel, Jiménez Ruiz, Jorge Alberto, Reynales Shigematsu, Luz Myriam, Waters, Hugh R
• Format: Journal Article
• Language: English
• Published: England BMJ Publishing Group Ltd 01.07.2011; BMJ Publishing Group; BMJ Publishing Group LTD; BMJ Group
• Subjects: Bans; Commerce - economics; Commerce - statistics & numerical data; Commerce - trends; econometrics; economic evaluation; Economic impact; Economic impact analysis; economics; Employment; environmental tobacco smoke; Federal law; Health Policy - economics; Health Policy - legislation & jurisprudence; Hospitality industries; Hospitality industry; Humans; Income - statistics & numerical data; Income - trends; Legislation; Mexico; Multivariate analysis; Nightclubs; Public health; public policy; Public spaces; Public transportation; Quasi-experimental methods; Research Paper; Restaurants; Restaurants - economics; Restaurants - legislation & jurisprudence; Sales; Secondhand smoke; Smoke; smoke-free laws; Smoking; Smoking - legislation & jurisprudence; Smoking Prevention; Tax increases; Tax revenues; Tobacco; Tobacco control; Tobacco smoke; Tobacco Smoke Pollution - legislation & jurisprudence; Tobacco Smoke Pollution - prevention & control; Tobacco smoking; VAT; Wages
• ISSN: 0964-4563; 1468-3318
• DOI: 10.1136/tc.2010.036467

ObjectiveTo evaluate the economic impact of Mexico City's 2008 smoke-free law—The Non-Smokers' Health Protection Law on restaurants, bars and nightclubs.Material and methodsWe used the Monthly Services Survey of businesses from January 2005 to April 2009—with revenues, employment and payments to employees as the principal outcomes. The results are estimated using a differences-in-differences regression model with fixed effects. The states of Jalisco, Nuevo León and México, where the law was not in effect, serve as a counterfactual comparison group.ResultsIn restaurants, after accounting for observable factors and the fixed effects, there was a 24.8% increase in restaurants' revenue associated with the smoke-free law. This difference is not statistically significant but shows that, on average, restaurants did not suffer economically as a result of the law. Total wages increased by 28.2% and employment increased by 16.2%. In nightclubs, bars and taverns there was a decrease of 1.5% in revenues and an increase of 0.1% and 3.0%, respectively, in wages and employment. None of these effects are statistically significant in multivariate analysis.ConclusionsThere is no statistically significant evidence that the Mexico City smoke-free law had a negative impact on restaurants' income, employees' wages and levels of employment. On the contrary, the results show a positive, though statistically non-significant, impact of the law on most of these outcomes. Mexico City's experience suggests that smoke-free laws in Mexico and elsewhere will not hurt economic productivity in the restaurant and bar industries.