THE PUBLIC DEMAND FOR SMOKING BANS

Smoking bans are gaining widespread support in the United States and o ther countries. While supporters argue that bans are necessary to reso lve market failures associated with negative externalities, the Cease Theorem predicts that, under various conditions, private markets inter nalize negative externalities. We examine the smoking issue within the framework of the Cease Theorem and hypothesize that smoking bans misa llocate air space resources shared by smokers and nonsmokers. Because smoking bans shift ownership of scarce resources, they are also hypoth esized to transfer income from one party (smokers) to another party (n onsmokers). Supporting evidence for these hypotheses is provided by an examination of a comprehensive smoking ban imposed in San Luis Obispo , CA.