Market Regulation and Firm Performance: The Case of Smoking Bans in the UK

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Show simple item record ADDA, Jérôme BERLINSKI, Samuel BHASKAR, V. MACHIN, Stephen 2011-03-07T15:53:02Z 2011-03-07T15:53:02Z 2011
dc.identifier.issn 1725-6704
dc.description We thank Mark Armstrong and seminar participants at Brown University, Cambridge University and Universidad Carlos III for helpful comments. Audrey Stern, Michele Savini and Warn Nurpear provided excellent research assistance.
dc.description.abstract This paper analyzes the effects of a ban on smoking in public places upon firms and consumers. Analysis of survey data from public houses finds that the Scottish smoking ban (introduced in March 2006) reduced pub sales and harmed medium run profitability. An event study analysis of the stock market performance of pub-holding companies corroborates the negative effects of the smoking ban on firm performance. We develop a model of public good provision by firms to offer an interpretation of these findings. In the context of smoking, the public good aspect and consumer heterogeneity in preferences regarding smoking appear to be central to the problem. The model allows us to examine the appropriate form of optimal regulation and to study the welfare effect of a smoking ban. The optimal policy response ensures that some pubs be permitted to allow smoking while others are not. en
dc.description.sponsorship Financial help acknowledged from the Nuffield Foundation and the ESRC (grant M544285003). en
dc.format.mimetype application/pdf
dc.language.iso en en
dc.relation.ispartofseries EUI ECO en
dc.relation.ispartofseries 2011/09 en
dc.rights info:eu-repo/semantics/openAccess
dc.subject regulation en
dc.subject smoking ban en
dc.subject market provision of quality en
dc.subject sales en
dc.subject prices en
dc.subject profitability en
dc.subject stock market performance en
dc.subject I18 en
dc.subject H23 en
dc.subject L51 en
dc.subject L81 en
dc.title Market Regulation and Firm Performance: The Case of Smoking Bans in the UK en
dc.type Working Paper en
dc.neeo.contributor ADDA|Jérôme|aut|EUI70013
dc.neeo.contributor BERLINSKI|Samuel|aut|
dc.neeo.contributor BHASKAR|V.|aut|
dc.neeo.contributor MACHIN|Stephen|aut|
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