Much Ado About Nothing? – Smoking Bans and Germany’s Hospitality Industry

Over the last years, public smoking bans have been introduced in most European countries. Unlike elsewhere, in Germany such bans were introduced at state level at diff erent points in time, which provides important intra-country regional variation that can be exploited to identify the eff ects of such bans on the hospitality industry. Using monthly data from a compulsory survey carried out by the German Federal Statistical Offi ce, we study the short-run eff ects that these bans had on establishments’ sales. In contrast to the largely US-based literature, we fi nd that smoke-free policies had a negative (yet moderate) eff ect on establishment sales. Closure rates of businesses in the hospitality industry, however, were not signifi cantly aff ected by the introduction of state smoking bans. JEL Classifi cation: L51; I12