Environmental Tobacco Smoke Regulations Have Not Hurt Restaurant Sales in North Carolina

Adam O. Goldstein, MD, and Rachel A. Sobel

North Carolina Medical Journal, 1998; 59: 284-287.

[The authors are affiliated with the Department of Family Medicine, University of North Carolina School of Medicine, Chapel Hill, NC 27599.]

(note: tables and figures are not available on-line)

The US Environmental Protection Agency, on review of available scientific evidence, has concluded that exposure to environmental tobacco smoke (ETS) causes serious and substantial health problems in this country.1 In 1992, the EPA declared tobacco smoke a Class A carcinogen, in the same category with asbestos, radon, and benzene. Exposure to ETS causes an estimated 3000 lung cancer deaths per year and a variety of respiratory illnesses in nonsmoking adults.1 Even more troubling, recent research shows that ETS causes heart disease. This means that there are 10-20 times as many ETS-related deaths from heart disease as from lung cancer.2 This toxic legacy is not surprising; ETS contains more than 4000 chemicals, 200 poisons, and 43 carcinogenic compounds.1,3

As we have become more aware of the harmful effects of tobacco use, many US communities have implemented ordinances to regulate smoking in workplaces and public places, including restaurants. Restaurateurs and restaurant associations have challenged these regulations by claiming that ETS ordinances cause economic damage to their business.4,5 Although such claims have been contradicted by several studies showing that ETS regulations do not have a negative economic impact,4,6-10 claims of lost revenue persist,4,5 hindering informed debate and the passage of strong ETS regulations. These claims are particularly common in tobacco-producing states, but in those states there has been no comprehensive examination of the economic impact of ETS ordinances on restaurant sales.

In 1989, the city of Greensboro passed the first significant ETS legislation in North Carolina.11 Several communities followed suit, prompting the tobacco industry to sponsor legislation in the 1993 NC General Assembly intended to preempt or prevent local communities from passing regulations more stringent than the proposed statewide law. The law, HB957, which passed in July 1993, contained no health measures to protect the public from ETS exposure, but it gave a 3-month window during which communities could adopt their own regulations. In that short time, 27 Boards of Health, 21 County Commissioners, and 41 City Councils passed 89 ETS regulations.11 Previous studies have assessed the processes by which these ETS regulations were passed, the politics leading to passage, and the degree of public health protection from ETS exposure they provide.11,12 To evaluate tobacco industry assertions about the negative effects of ETS ordinances, we looked at the economic impact of these ETS regulations on restaurant sales and the resultant political consequences.


The various ETS ordinances passed by North Carolina counties and communities differ in the degree of protection they offer.12 We examined the impact of ETS ordinances on restaurant sales only in counties with stringent ETS ordinances that had been passed by Boards of Health because such Boards maintain countywide jurisdiction. The Boards of Health all adopted at least 33% nonsmoking areas in restaurants, increasing the amount of restaurant area covered to 80%-100% within 1-2 years in most cases. For comparison, we examined counties that did not have any restaurant ETS ordinance during the study time. We matched counties with and without an ETS ordinance on the basis of population, per capita income, and acres of tobacco harvested; we analyzed the 5 best matches (Table 1, next page).

Data on county restaurant and gross retail sales were obtained from the NC Department of Revenue, Tax Research Division, for 6 fiscal years from 1990-1991 through 1996-1997 (data for fiscal year 1991-1992 were unavailable). The NC Department of Revenue is an objective and consistent data collector and collects economic information from all eating establishments in a county, not just a random sample.

Following the model of Glantz and Smith,4 population growth, inflation, and changes in underlying economic conditions were accounted for by computing the fraction (F) of total retail sales represented by restaurant sales (F= restaurant sales/total retail sales). If an ordinance adversely affects restaurant sales, F will drop after the ordinance goes into effect. We also compared restaurant sales in cities with an ordinance to those in cities without an ordinance by calculating the ratio (C) of sales in paired counties (C= restaurant sales in counties with ordinance/restaurant sales in counties without ordinance). If an ordinance adversely affects restaurant sales, C will drop after the ordinance goes into effect. Significance of differences over time in F and C were tested using paired t-tests, along with regression analyses according to the model of Glantz and Smith.4 Models were adjusted to account for varying dates and degrees of implementation.


The 5 counties with strong ETS ordinances and the 5 without each had a combined population of over 900,000 (thus accounting for about 30% of the state‚s population). These counties included both tobacco producing and nonproducing areas, but 3 of the 5 ordinance counties harvested more acres of tobacco annually than the matching nonordinance counties (Table 1).

Table 2 summarizes the findings relative to F, the fraction of restaurant sales to total retail sales. There was little fluctuation in F over the five fiscal years in counties with and without ETS ordinances. The mean value of F in counties with an ETS ordinance (9.1) was higher than the mean value of F in counties without an ETS ordinance (8.3). The standard deviation of the means of F were quite small both in counties with and without ETS ordinances, indicating relative homogeneity in restaurant sales over the study period. Counties without ETS ordinances showed increases and decreases similar to those in matched counties with ETS ordinances.

Table 3 summarizes the results of the ratio (C) of restaurant sales in cities with an ordinance to restaurant sales in cities without an ordinance. There were no consistent changes in restaurant sales after the ETS ordinances took effect.

Paired t-tests showed no significant difference in combined restaurant sales in the 10 counties for fiscal years 1990-1991 and 1992-1993, prior to the ordinances, compared to sales for fiscal years 1994-1997, following implementation of the ordinances. There also were no statistically significant differences by regression analyses and the coefficients for F or C.


Our data show that implementation of stringent ETS regulations had no adverse economic impact on restaurant sales in 5 North Carolina counties. These findings are consistent with those from other communities,4,6,7-10 and are not the first to show the absence of negative effect from ETS regulations in a major tobacco producing state. Our findings confirm 2 small telephone studies conducted in Wake and Orange counties to determine the impact of their local ordinances. In both counties, a majority of restaurant owners or managers said that their county‚s ETS ordinance had no negative economic impact on their business.13,14

Major tobacco-producing states have generally resisted comprehensive ordinances regulating ETS exposure.11,15 For instance, at the beginning of 1993, Kentucky, North Carolina, South Carolina, Georgia, and Tennessee had passed a total of only 11 local ETS ordinances, and few of them offered significant public protection from ETS exposure.15 By October 1993, North Carolina communities had passed a total of 89 ETS ordinances in response to preemption legislation passed by the General Assembly.12

The rights of Boards of Health to pass ETS regulations have been threatened. In December 1996, the NC Court of Appeals invalidated the Halifax County Board of Health ETS ordinance because the ordinance had granted exceptions to the regulations based on perceived economic harm to smaller restaurants or because of difficulty in enforcement.16 The Court of Appeals recognized the authority of a Board of Health to pass ETS regulations, but denied it the authority to create exceptions unless they are based on public health. Rulings in New York and Ohio also state that a Board of Health can regulate ETS exposure in public places but cannot create exceptions to an ETS ordinance based on non-health related concerns.17

The NC Court of Appeals decision affected not only Halifax but all counties with similar Board of Health ETS ordinances. By February 1997, 14 Boards of Health had suspended enforcement of their ETS regulations, 7 were undecided on their course of action, and only 5 were attempting to uphold their ordinances (personal communication, J. Barnhardt, 9/24/97). Most said they needed legislative action to enable them to redress the issue because the 1993 statewide preemption bill (HB957) currently prevents them from adopting new ordinances. Now, virtually all NC Board of Health regulations have been suspended, or left on the books with no enforcement.

Thus, ironically, HB957, which was the impetus for communities throughout the state to adopt ETS ordinances, now prevents them from protecting citizens from exposure to ETS. HB957 prevents North Carolina communities from working toward stronger, more protective regulations; the majority of health ETS ordinances passed by county boards have been invalidated and Boards of Health are prevented from passing regulations to replace those annulled by the Halifax County Court of Appeals decision. The lack of statewide or significant local ETS regulations presents a clear danger and challenge to public health.


Until recently, ordinances in many North Carolina counties provided protection from ETS exposure in workplaces and public places, including restaurants. Our research shows that this protection resulted in no adverse economic effect on the restaurant industry. Even in the number one tobacco-producing state in the US, ETS regulations present no adverse economic impact, and there is no need for exceptions to the ordinances based on such fears. Now we must ask our legislators to muster the political will to enact such legislation.


1 US Environmental Protection Agency. Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders. US EPA, Office of Research and Development, 1992.

2 Kawachi I, Colditz GA, Speizer FE, et al. A prospective study of passive smoking and coronary heart disease. Circulation 1997;95:2374-9.

3 American Lung Association. Fact Sheet: Secondhand Smoke. Internet: http://www.lungusa.org/press/report/smking/smksecon fac.html

4 Glantz SA, Smith RA. The effect of ordinances requiring smoke-free restaurants on restaurant sales. Am J Public Health 1994;84: 1081-5.

5 Ruley M. Tobacco Goes A-Courtin‚: Wake County Restaurants Try to Stub Out Smoking Regulations. Durham, NC: The Independent Weekly, Feb. 23, 1994.

6 Pope GC, Bartosch WJ. Preliminary analysis of the economic impact of Brookline‚s smoking ban. Waltham, MA: Health Economics Research, Inc. November 20, 1995.

7 Corsun D, Young CA, Enz CA. Should NYC‚s restaurateurs lighten up? Effects of the city‚s smoke-free-air act. Ithaca, NY: Cornell Hotel and Restaurant Administration Quarterly, 1996, p 37.

8 US Department of Health and Human Services. Assessment of the impact of 100% smoke-free ordinance on restaurant sales: West Lake Hills, Texas, 1992-1994. MMWR 1995;44:369-72.

9 Sciacca J, Eckrem M. Effects of a city ordinance regulating smoking in restaurants and retail stores. J of Comm Health 1993; 18:175-82.

10 Taylor Consulting Group. The San Luis Obispo Smoking Ordinance: A Study of the Economic Impacts on San Luis Obispo Restaurants and Bars. San Luis Obispo, CA: Taylor Consulting Group, 1993.

11 Bearman NS, Goldstein AO, Bryan DC. Legislating clean air: politics, preemption, and the health of the public. NC Med J 1995;56:14-9.

12 Conlisk E, Siegel M, Lengerich E, Kenzie WM, Malek S, Erikson M. The status of local smoking regulations in North Carolina following a state preemption bill. JAMA 1995;273:805-7.

13 Cooke C. American Lung Association of North Carolina and the University of North Carolina School of Public Health. Effects of smoking control regulations on restaurants in Wake County, North Carolina. April 1994.

14 Goldstein AO, Sobel RA. Ives TJ. Impact of the North Carolina Orange County Board of Health Smoking Control Rules on local restaurants. NC Med J 1998;59:288.

15 US Department of Health and Human Services. Major Local Tobacco Control Ordinances in the United States. NIH Pub. No. 93-3532, 1993.

16 478 South Eastern Reporter 2nd Series. 528-536. Halifax Court of Appeals Decision.

17 Gottlieb M. Bowled Over! Tobacco on Trial. The newsletter of the Tobacco Products Liability Project. Boston: Northeastern University, School of Law, July 1997.

(c)1998 North Carolina Medical Society