• Research Review
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Title: The economic impact of Mexico City's smoke-free law

Authors: C Guerrero, J Ruiz, L Shigematsu, H Waters

Reference: Tobacco Control 2011; published online 3 February 2011 (open access)
http://bit.ly/pe071I

Reviewer: Joaquin Barnoya, MD, MPH, Contributing Editor, ProCor; Research Assistant, Professor of Surgery, Washington University in St. Louis, Missouri, USA; Director, Research and Education, Unidad de Cirugia Cardiovascular de Guatemala, Guatemala

Reviewer comments: One of the main arguments used by the tobacco industry to oppose smoke-free environments is that the hospitality industry will suffer an economic downturn. Data from developed countries has proven this argument to be false. However, as the smoke-free movement moves to middle- and low-income countries, this type of economic analysis should become a powerful counterargument for the industries' false claims.

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Purpose of study: To determine the impact of Mexico City's 2008 smoke-free law on restaurants, bars, and nightclubs in terms of revenues, wages and employment

Location of study: Mexico City, Mexico

Methods: Quasi-experimental, differences-in-differences estimation procedure to measure the impact of the law. This approach takes into account unmeasured factors and evaluates the outcomes in the post-period in the absence of the law. The real impact of the policy change should be the difference between this counterfactual outcome and the actual observed outcome. The quasi-experimental design uses counterfactual areas (Jalisco, Nuevo Leon, and Mexico [different from the City]) similar to the Mexico City but not exposed to the law. Outcome variables were revenues per day worked, wages per day worked and total employment in restaurants with waiters, nightclubs, bars and pubs. Results were corrected for inflation and data from the Monthly Services Survey collected by the National Institute for Statistics and Geography.

Results: Difference between the treatment (Mexico City) and counterfactual groups was not statistically significant in any of the models. Implementation of the law was associated with a 24.8% non-significant increase on revenues for restaurants with waiter service. Regarding the effect on wages and employment, there was a 28.2% and 16.2% increase, respectively (p>0.05). The effect on nightclubs, bars and pubs were also non-significant (-1.5%, 0.1%, and 3%, respectively). A separate model that included among the independent variables separate linear time trends for employment, wages and income, yield no significant effect, rejecting the hypothesis that over time these factors have a differential impact on the outcome variables in the treatment and control group.