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 sudden and permanent shift in the level of sales. Secondly, the impact was gradual and permanent; it resulted in a gradual change in sales and this accumulated effect was permanent. Thirdly, the impact was abrupt and temporary; it resulted in a sudden change, but this change disappeared in a short time.

We obtained data on restaurant sales from the Australian Bureau of Statistics Retail Trade Survey.¹ Following Glantz and Smith^2,3 to account for underlying economic trends, unemployment, and population changes, we computed the following four ratios for the period January 1990 to September 2002:

• ratio of monthly turnover for pubs and licensed clubs to total monthly retail turnover (minus pubs and licensed clubs turnover) for Tasmania

• ratio of monthly turnover for pubs and licensed clubs in Tasmania to monthly turnover for pubs and licensed clubs in Australia

• ratio of monthly turnover for restaurants and cafés to total monthly retail turnover (minus restaurant and café turnover) for Tasmania

• ratio of monthly turnover for restaurants and cafés in Tasmania to monthly turnover for restaurants and cafés in Queensland and the Northern Territory.

New South Wales, Victoria, South Australia, West Australia, and the Australian Capital Territory restaurant and café sales data were omitted from computation of the final ratio since smoke-free policies were introduced in these jurisdictions during the period under analysis and could have influenced total Australian sales figures.

We used interrupted time series analysis (also known as intervention analysis) and autoregressive integrated moving average (ARIMA) modelling to estimate the effect on the four ratios (the time series) of the smoke-free legislation (the intervention) in Tasmania. This statistical technique was explained in detail in the report of our study on the impact of policies in restaurants in South Australia.⁴

Table 1 provides parameter estimates for the impact of smoke-free legislation on the ratio of sales in Tasmanian pubs to Tasmanian retail sales. None of the three hypotheses were supported. Results for the ratio of Tasmanian pubs to Australian pubs is omitted, since it provides the same conclusion. Thus, we conclude that the smoke-free law had no impact on the ratio of sales in Tasmanian pubs to Tasmanian retail sales.

Table 2 provides parameter estimates for the impact of smoke-free legislation on ratio of monthly turnover for restaurants and cafés to total monthly retail turnover in Tasmania. None of the three hypotheses were supported. Results for the ratio of Tasmanian restaurants to Queensland and Northern Territory restaurants is omitted, since it provides the same conclusion. Thus, the smoke-free law had no impact on ratio of monthly turnover for restaurants and cafés to total monthly retail turnover in Tasmania.

Decision makers introducing smoke-free policies in hospitality venues can be more confident there will be no negative impact on sales.