A study from a Missouri economist concludes that smoking bans passed by local communities can have a negative economic impact on bars and restaurants previously frequented by smokers, the Associated Press reported Jan. 23.

Sales-tax revenues at bars and restaurants in Columbia, Mo., declined 5 percent since the town passed an indoor smoking ban a year ago, according to economist Michael Pakko of the Federal Reserve Bank of St. Louis. "All too often policy makers are given this package of smoking bans are good for health and there is no impact on business," Pakko said. "Certainly it's not going to cause a town to go into the tank, but it will have a negative impact on some businesses."

Pakko said that research has shown that bans in regions with higher percentages of smokers have a greater economic impact. Bars and restaurants also are hit harder in cold-weather areas where going outside to smoke is a greater hardship.

With a local ban like Columbia's -- unlike a statewide ban -- smokers also have greater ability to go elsewhere in the immediate area to find a bar or restaurant that allows smoking.

However, Columbia Mayor Darwin Hindman called the ban a big success and said that the closure of about a dozen bars and restaurants in the city during the past year was due to the opening of a number of new establishments. "When you have a change, whether it be a market change or regulatory change, some people adjust better than others," Hindman said.

Pakko's study appeared in the January 2008 issue of The Regional Economist.