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The Public Demand For Smoking Bans

February 1, 1996

This essay, written by Arizona State University economics professor William Boyes and Florida Atlantic University economics professor Michael Marlow, examines the economics of allocating air space resources between smokers and non-smokers in terms of

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This essay, written by Arizona State University economics professor William Boyes and Florida Atlantic University economics professor Michael Marlow, examines the economics of allocating air space resources between smokers and non-smokers in terms of efficiency and externalities created by the allocation.

“Although it is common to view clean air as a resource in the public domain, this is not true in the case of the air space within privately-owned establishments such as restaurants and bars,” they write. “While it would be unrealistic to assume that smokers and nonsmokers directly negotitate every time they patronize a bar or restaurant, in a certain sense, negotiation between smokers and nonsmokers does occur via the owners of the private establishments. Air space within bars and restaurants is not common property; rather it is the property of the owner of the establishment.”

“In the case of the privately owned resource, such as the airspace within a privately owned business establishment, the public policy used to ‘remedy’ the supposed market failure causes the transactions cost of one participant in the market, smokers, to rise from some finite value to near infinity. Thus, smoking bans create a situation where users of the privately owned air space may no longer bid for use of that resource and the private property owners can no longer efficiently allocate it between smokers and nonsmokers.”

Author
Michael L. Marlow is professor of economics at Cal Poly, San Luis Obispo.
mmarlow@calpoly.edu