Tobacco.org

INDIVIGLIO: The Market Doesn't Demand Non-Smoking Bars 

I would first argue that alcohol and cigarettes are probably complementary goods. Having bars without smoking is kind of like having a hamburger restaurant with no hamburger buns: the two go together naturally. You could have one without the other, and there may even be a market for that. But these goods are so complementary, it might not happen.

For cigarettes and alcohol, I'd argue that their complementary nature is historically driven and probably less functionally driven like the hamburger and bun comparison . . .

I wouldn't call a lack of smokeless bars a market failure, because I don't think that markets with lackluster demand that already contain pretty good alternatives should be created. Is there a market for hamburger restaurants with no buns for carb conscious people? Maybe, but it doesn't seem to be strong enough for bun-less hamburger restaurants to be popping up -- especially since people can just cook their own at home without the bun if they choose.

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