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Page 16 The price elasticity of demand for the bar/tavern industry is estimated to be approximately -1.9, after adjusting the regression price coefficient by industry labor productivity. While the demand for alcoholic beverages is inelastic (less than -1.0), the consumption of these drinks in a bar or tavern environment has been found by other researchers to be significantlymore price sensitive. The magnitude of the estimated price elasticity puts the measurement in the elastic zone, implying relatively high price sensitivityby bar patrons. The negative coefficient for the smoking-ban"dummy" variable indicates a statistically significant detrimental impact on industry employment which dates back to the earlier initiative by New York City in 1995 and worsened by the NYCINYS action in 2003. A similar function �as fit for the restaurant industry. A log • log employment demand equation v�s estimated linking restaurant industry employment to personal income, an industry price deflator and dummy variables for the WTC attack transition and the introduction of smoking-ban regulations. The anti-smokingban dummy v�as customized to reflect the coverage impact on the restaurant industry, distinct from the bar/tavern industry Regression of Ln (NYS employment in the restaurant industty) on the following: coefficient t-value intercept 6.00247 8.626 Ln (NYS personal income) 0.5761 5.231 DummyR -014156 -6.585 l��nm�� .{�QS� �.� Ln(industryprice) -030538 -1.798 L,n�cm�l � �3} �,��'� '�_��S r-square = 0.9914 r-bar square = 0.9893 where . industry price - price deflator for the restaurant industry (2000=100.0� 1978-2003 DummyR • category variable coded to reflect industry coverage of 1995 NXC ban and 2003 NYC/Nl'S bans 1978-2003 The income elasticity for the restaurant industry is estimated to be 2.1. Like the bar/tavern industry, this industryprovidesproducts that are viewed as "normal" goods by its customers. The magnitude of the elasticity is somewhat larger than that of the bar/tavern industry, suggesting a bigger industry response to changes in general economic conditions. Other studies have found the income elasticity for the restaurant industry in the 2.0 - 3.0 range.