I have three thoughts in response to Ramesh’s question. First, it may well be the case that smokers place greater weight on whether a bar or restaurant allows smoking than non-smokers. That is, a restaurant may lose smokers by going smoke-free, but may not gain any more non-smoking customers. If that is indeed the relative weight of each group’s subjective preferences, we would expect relatively few non-smoking bars.
Second, in some cities, local regulations operate to increase the smokiness of bars by prohibiting smoking the in main dining rooms of restaurants above a given size, but allowing smoking in bars and adjoining areas. Such laws can have the effect of turning bars into the de facto smoking areas of many restaurants.
Third, despite the above, some restaurants go non-smoking and promote that fact, and the number may well vary based upon local preferences. Carlyle Grand is a notable, and very popular, example of a non-smoking establishment in D.C. that advertises its policy. Out here in Bozeman, non-smoking establishments are widespread, incuding sports bars, ale houses, and most restaurants. In Cleveland, on the other hand, I can only think of a handful of establishments that prohibit smoking, including a few wine bars and the Great Lakes brew pub. That the ratio of smoking to non-smoking establishments would vary from city to city is no surprise.
It is certainly fair to wonder why there aren’t more non-smoking estabilshments. Of course, if anti-smoking activists spent half as much time trying to pressure individual restaurants to limit or prohibit smoking as they did trying to enact laws, the number of non-smoking establishments would surely rise.