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How Do Private Markets Address Smoking Externalities?

Amelia Biehl and Christopher C. Douglas
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Amelia Biehl: University of Michigan-Flint
Christopher C. Douglas: University of Michigan-Flint

Journal of Economic Insight (formerly the Journal of Economics (MVEA)), 2011, vol. 37, issue 1, 39-57

Abstract: We survey bars and restaurants in Genesee County, Michigan to examine how, absent a smoking ban, different establishments accommodate smokers and nonsmokers. We find evidence that smokers and nonsmokers are systematically accommodated. The majority of establishments without bars voluntarily ban smoking, and the majority of establishments with bars restrict smoking to a separate room or to the bar area. This pattern of accommodation is consistent with what the Coase Theorem would predict when dealing with the externalities created by secondhand smoke.

JEL-codes: D21 H75 I18 (search for similar items in EconPapers)
Date: 2011
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Journal of Economic Insight (formerly the Journal of Economics (MVEA)) is currently edited by David R. Hakes

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Handle: RePEc:mve:journl:v:37:y:2011:i:1:p:39-57