Re-exploring the early relationship between teenage cigarette and e-cigarette use using price and tax changes

34 Pages Posted: 30 Nov 2017 Last revised: 3 Apr 2021

See all articles by Michael Pesko

Michael Pesko

Georgia State University - Department of Economics

Casey Warman

Dalhousie University

Date Written: April 2, 2021

Abstract

In 2016, the Surgeon General used longitudinal cohort studies to conclude that youth e-cigarette use is strongly associated with cigarette use. We re-evaluate data from the period of time before the writing of the Surgeon General report, using quasi-experimental methods, and reach the opposite conclusion. We study contemporaneous and intertemporal effects of e-cigarette and cigarette price and tax changes (including from an early e-cigarette tax in Minnesota). Our price variation comes from 35,000 retailers participating in the Nielsen Retail Scanner data system. We match price and tax variation to survey data on current use of e-cigarettes and cigarettes for over 94,000 students between grades 6 to 12 in the National Youth Tobacco Survey (NYTS) for years 2011 to 2015. We find evidence that e-cigarettes and cigarettes are same-period economic substitutes. Coefficient estimates (while imprecisely estimated) also suggest potentially large positive effects of past e-cigarette prices on current cigarette use, indicating intertemporal economic substitution. Our paper alongside other new studies and data showing rapidly declining youth cigarette use suggests that the conclusion reached on the relationship between e-cigarettes and cigarettes in government-approved reports was incorrect, and we recommend possible solutions.

Keywords: Tobacco control; Cigarette use; E-cigarette use; Tax policy

JEL Classification: I18, H71

Suggested Citation

Pesko, Michael and Warman, Casey, Re-exploring the early relationship between teenage cigarette and e-cigarette use using price and tax changes (April 2, 2021). Available at SSRN: https://ssrn.com/abstract=3077468 or http://dx.doi.org/10.2139/ssrn.3077468

Michael Pesko (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Casey Warman

Dalhousie University ( email )

Halifax, Nova Scotia B3H 3J5
Canada

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