Tasmania has a population of approximately 473 400—about 4% of the population of Australia—and around 320 bars (known in Australia as “pubs”) and licensed clubs and 400 restaurants and cafes. Legislation came into force there on 1 September 2001 to mandate smoke-free enclosed work and public places, with exemptions for bar and gaming areas where meals are not served or consumed.

Our study assessed the economic impact of introducing smoke-free polices in Tasmania on sales in bars, licensed clubs, restaurants, and cafes. We used seasonally adjusted monthly sales data from January 1990 to September 2002 and statistically controlled for trends and random fluctuations. Three distinct hypotheses about the nature of the economic impact are examined. Firstly, the impact was abrupt and permanent; it resulted in a …