Tuesday, July 31, 2007



According to many , the harms from cigarette smoke are well known and scientifically documented. Many on both sides of the issue have stated that they purposely avoid restaurants that allow smoking by eating elsewhere.

One might compare bans on smoking to restaurant inspections, bans on leaded paint, or drunk driving laws, all of which are implemented to protect the public from harm.
When should government get involved? One case is when individual decisions harm others without compensating them. This is what economists refer to as a ‘negative externality.’

In some cases, if individuals can come to an agreement on their own through property rights, exchanges, contracting, or some other type of arrangement, government intervention may not be necessary. However, in the case of drunk driving, it is not possible for other drivers to know who is intoxicated and who isn’t. No agreement can be made to avoid harm. In purchasing a home, one may not be able to contract for the effect of lead poisoning if they are unaware about the use of lead paint. When eating at a restaurant, it may not be possible to know if food was handled properly before eating. In these cases when there is both an information and bargaining problem, the theoretical argument for statutory action by government is often accepted.

When it comes to making an argument for implementing a smoking ban, two important questions should be asked. Is there sufficient information available so that when citizens enter a restaurant they can recognize the presence of harmful second hand smoke and understand the danger it poses? If so, does the market provide a way to easily avoid it? If you have trouble answering this, re-read the first paragraph.

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