2004 Restaurant Market Value Study

Smoke-free ordinances increase restaurant profit and value
Alamar, B.C.; Glantz, S.A.
Contemporary Economic Policy 22(4): 520-525, October 2004

Smokefree air is good for business, according to a new study published in the October 2004 issue of Contemporary Economic Policy. The new research shows that restaurants in smokefree cities have on average a 16% higher market value at resale than comparable restaurants located in smoke-filled cities. This increase in the sale price of a restaurant - about $15,300 - is directly attributed to the existence of a smokefree ordinance and reflects the fact that restaurants in communities with smokefree ordinances are more profitable.

The study, co-authored by University of California San Francisco researchers Benjamin Alamar and Stanton Glantz, examined the sale price of a national sample of over 600 restaurants sold between 1991 and 2002 and controls for economic disparities and types of restaurants.

Cynthia Hallett, Executive Director of Americans for Nonsmokers' Rights, said "The findings of this report do not come as a surprise. Economic studies based on objective data have shown that smokefree laws are not only good for health, but also good for business. The bottom line, however, is that secondhand smoke remains a serious public health problem. Hospitality industry workers have the highest cancer rate of any occupational sector in America."

Across the United States more than 6,800 municipalities, about 44.5% of the national population, are now covered by local or statewide smokefree workplace laws. Studies in Montana and Ohio have linked smokefree workplace laws with immediate reductions in heart attack rates, while research from New York, Boston, and Delaware has demonstrated the immediate improvement in worker health and indoor air quality that comes with the implementation of a smokefree indoor air ordinance.