What A Smoking Ban Would Mean For Indiana

Published February 5, 2009

While Indiana’s legislature and citizens debate the merits of a draconian statewide smoking ban, business owners are already taking steps to balance the wishes of the smoking and nonsmoking populations.

Government intervention is not the only way to protect citizens from the nuisance and claimed health hazards associated with smoking in public places. Personal choice, market forces, and business logic already have made the proposed statewide smoking ban nothing more than another heavy-handed government regulation that will hurt the state’s economy.

Many businesses have already gone smoke-free or otherwise tailored their establishments to attract nonsmokers, and many more will undoubtedly follow suit as smoking rates continue to decline in the state. Most Hoosiers—nearly 76 percent—are not regular smokers, and businesses want to attract them as customers.

The increase in nonsmoking restaurant, bar, hotel, and gambling spaces in Indiana over the years clearly indicates the marketplace is adapting to Hoosiers’ decreasing willingness to be around tobacco smoke. Making the state government a de facto nanny is neither wise nor necessary. Just as homeowners have the right to decide whether to allow smoking in their private homes, businesses should have the same right.

Implementing a smoking ban will unquestionably drive down state and local tax revenues. Hoosiers need only look to their neighbors to the north for a glimpse of things to come. Since Illinois’ smoking ban took effect in January of last year, the cumulative adjusted gross receipts of the state’s casinos calculated up until November were down a whopping 20.28 percent from the same time frame prior to the ban. In addition to lower receipts—and therefore lower tax revenue for the state and local governments—Illinois casinos were forced to lay off 12 percent of their employees.

While some of this can be attributed to the sinking economy, casinos in Indiana and Iowa—two neighboring states currently without smoking bans—continue to perform well. The real culprit is clearly Illinois’ statewide smoking ban. In addition, research shows businesses in states with relatively colder climates, such as Indiana, are harder hit by smoking bans than warmer states.

At stake for the Hoosier State are not only tax revenues, tourism, and jobs in a sluggish economy, but also the state’s attitude toward basic property rights. A respect for property rights requires leaving business owners free to make decisions on their own, with the marketplace rewarding or punishing them for their choices. Respecting property rights is crucial to making Indiana attractive to businesses and high-productivity workers.

Indiana’s adult smoking rate is continuing to decline, reaching a low of 24.1 percent in 2007. That’s why businesses are steadily making their establishments more nonsmoker-friendly … without additional government intervention.

Further harassing the smoking minority—who are using a legal product, after all—and the businesses that cater to them is wrong and will hurt the state’s economy. The marketplace, not government, is the best and fairest mechanism for accommodating Hoosiers’ wants and concerns.

The following articles offer additional information on the impact of smoking bans.


Still Pooping in My Salad
Heartland President Joseph Bast addresses the wide range of issues raised by smoking bans—from secondhand smoke to the economics of smoking bans to the impact on freedom and property rights.

Research & Commentary: Smoking Bans and Property Rights
John Nothdurft, a legislative specialist for The Heartland Institute, looks at the property rights issues associated with smoking bans. He notes, “The community is better served when businesses, employees, and consumers are allowed to self-regulate and reach accommodations among themselves, rather than punishing some by legislative force.”

The Economic Impact of a Smoking Ban in Columbia, Missouri
Michael Pakko, an economist at the Federal Reserve Bank of St. Louis, found evidence that suggests the economic costs of smoking bans are likely to be focused on some specific categories of businesses—those that tend to be frequented by smokers. Pakko notes, “statistically significant costs have been identified for casinos and bars, in particular.”

Smoking Bans Cloud Free Market’s Ability to Thrive
The Bluegrass Institute for Public Policy Solutions takes a comprehensive look at smoking bans. It concludes the best way to promote win-win smoking policy is to inform and educate rather than legislate and regulate.

The Private Market for Accommodations: Determinants of Smoking Policies in Restaurants and Bars
This study finds there is a vibrant market for both smoking and non-smoking establishments and that government intervention negatively alters the market. “This study predicts that owners are likely to suffer losses when government bans and restrictions significantly overturn smoking policies chosen in the absence of government intervention.”

You Don’t Own Joe’s Bar and Grill
This article explains how a Toronto smoking ban reduces consumer choice and is an assault on property rights. In a free economy, businesses should be allowed to adapt to their customers’ wants.

The Case Against Smoking Bans
Thomas A. Lambert, an associate professor at the University of Missouri-Columbia School of Law, contends the market is the best place to make decisions on smoking. He writes, “a laissez-faire approach better accommodates heterogeneous preferences regarding public smoking.”

The Economic Impact of the New York State Smoking Ban on New York’s Bars
This research finds there were significant losses of jobs, gross state product, and labor earnings as a result of New York’s smoking ban.


For further information on the subject, visit The Heartland Institute’s Web site at www.heartland.org, where you will find articles on the issue available through PolicyBot, Heartland’s free research database.

Nothing in this message is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. If you have any questions about this issue or the Heartland Web site, contact Legislative Specialist John Nothdurft at 312/377-4000 or [email protected]