The Political Economy of Smoking Ban Exemptions

Two interesting items on exemptions to smoking bans have come through my Google Reader recently.

First, Jacob Grier points out that cigar bar exemptions seem pretty elitist, especially when they specifically prohibit cigarette smoking in the cigar bar. I can’t think of a decent reason for allowing cigar smoking but not cigarette smoking in the same establishment. If secondhand tobacco smoke is harmful, surely the source doesn’t really matter. Jacob points out that cigar bars and cigar smokers, generally being more upmarket types, will have more resources to lobby government for exemptions. That’s undoubtedly part of the story, but I suspect there’s also a bit of Bootleggers and Baptists going on here. I’d say cigar smoking is generally more socially acceptable than cigarette smoking, and so the self-interest of cigar smokers and cigar bar operators can be combined with a more compelling moral argument than is the case with cigarettes. This should make their lobbying efforts more successful, which is exactly what we see.

Second, Matt Schonert points to the possible smoking ban in Illinois Michigan, which will likely exempt casinos. The argument from the casinos is that they’ll lose business to Native American casinos in the state which will continue to allow smoking. The exemption, as Matt points out, is a clear example of rent-seeking. My guess is that the casinos have succeeded where restaurants and bars have failed mainly because the casino industry has higher cooperative efficacy, i.e. it is more able to overcome the interfirm collective action problem of lobbying for government favouritism. Compare the casino industry in any given town to the bar industry. There will likely be fewer casinos than bars, and possibly a history of cooperation among casinos in order to share information about cheats, etc. This will allow them to more effectively detect and punish those casinos which freeride on the lobbying efforts of others, encouraging more lobbying effort from all casinos (total lobbying effort being a public good within the industry).

All of the effort casinos and cigar bars exert to avoid smoking bans is, of course, pure loss from a social point of view. If legislators really want to implement a smoking ban with exemptions for those businesses likely to be hit the hardest, a much better way would be to sell exemptions. This way, none of this wasteful rent-seeking or bigoted favouritism would happen.

5 Responses

  1. What if the governments mandated that all currently smoke-free hospitality venues MUST provide a smoking section to accommodate smokers, against the wishes of business owners who choose
    to go smoke-free of their own free will?

    That wouldn’t be fair, would it?
    Neither are government mandated smoking bans.

  2. Excellent post. Just one thing to point out — the ban I discussed was for Michigan, not Illinois. If I’m not mistaken, Illinois enacted a ban last year.

  3. Banning smoking is an infringement on property rights. No one has the “right” to a “smoke-free” environment on someone else’s property. It’s not a right if it imposes an obligation on another person.

    Any owner of a bar or restaurant (or workplace, building or enclosed or open area) can allow, restrict or prohibit smoking if he so chooses. The marketplace is the best arbiter. It’s up to each owner to determine how his decisions about smoking affect his business.

    Equally important, consumers have the right to freely patronize a business based on a variety of factors — and smoking may be one consideration. You may choose where you eat or shop, but you have no right to force your preference on others, or demand by government mandate that a business owner accommodate your wants, needs or desires, regardless of how beneficial you feel it would be to yourself and others.

    I am a nonsmoker, yet I don’t understand why public servants are so eager to turn a small advocacy group’s private agenda into public policy, then stick taxpayers and property owners with the costs and regulations. Nor do I understand why more folks don’t take Abe Lincoln’s warning more seriously: “Those who deny freedom to others deserve it not for themselves.”

    — Mike Braun, Fort Worth

  4. There is no reason to ban a legal product on ‘private’ property.
    It is the special interest groups who want to ban smoking on ‘private’ property.
    The Heart and Stroke foundation, The lung Association and the Cancer Sociaty.
    I uge all people to NOT donate to these organisations.
    In essance they are telling you, and the owners of the hospairality industry that you cannot or permit a leagl product on private property.
    Is this the American Way??

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