Mar 14, 2008 – 04:05:09 CDT – By SARA KINCAID – Bismarck Tribune
A smoking ban had no effect on restaurant and bar revenue, according to an analysis of tax records by the Bismarck Tobacco Free Coalition.
The analysis showed revenue growth prior to the city smoking ban and revenue continued to increase, even after the ban went into effect. Duane B. Pool, presented the analysis at the coalition’s meeting Thursday.
Pool analyzed tax records from the first quarter of 2002 to the first quarter of 2006. The city smoking ban started in October 2006, which restricted smoking in restaurants and bars attached to restaurants. Free-standing bars, truck stops and hotels could still allow smoking under the ordinance.
Individual businesses were not studied, rather full-service restaurants only were placed in groups of five based on revenue. The five businesses that produced the most revenue were group one, and so-forth, to the five lowest revenue-generating restaurants.
Over the five-year period, revenue increased. Prior to the ban, revenue increased 3.2 percent, and after the ban, revenue increased 7.2 percent, Pool said. The ban did not cause revenue to go up, but it did not hinder the business’ ability to earn money, he said.
“Regulation costs are not being transferred to the business, and the ban is not affecting growth in the industry,” Pool said.
The cause for the increase in revenue is likely the addition of 13 new restaurants in Bismarck. Revenue increased, and the new restaurants also cornered a larger share of the restaurant revenue each year. The new establishments had 14.2 percent of the market share at the beginning of the study and 23 percent of the market share at the end of the study.
The economic analysis was done by Pool. Robin Reich of Colorado State University and Michael Carroll of Bowling Green State University contributed to the analysis.