The influence of a smoking ban on the profitability of Belgian restaurants.

OBJECTIVE To examine whether the nationwide smoking ban, imposed in 2007, had an impact on the profitability of Belgian restaurants. DATA AND METHODS Objective financial reporting data on 1613 restaurants were analysed with return on assets as the outcome measure. The data were collected from the Belfirst database and cover the period 2004-2009. To assess the impact of the smoking ban, a differences-in-differences estimation method was used, with bars serving as the control group. The regression model was estimated, while controlling for firm-specific characteristics and unobserved firm-level heterogeneity. RESULTS The variable of interest is the interaction between the smoking ban dummy and the dummy for the treatment group. The coefficient of this variable is insignificant. CONCLUSION The adoption of the nationwide smoking ban did not affect the profitability of Belgian restaurants.