ENDS Economic Impact

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2021: Economics of E-Cigarettes: Background, Theory, and Evidence

Studies and Reports

Multiple Years: VTA

  • Multiple Reports

2019: An Economic Analysis of the Pre-Deeming US Market for Nicotine Vaping Products

  • The largely unregulated US NVP market has been highly competitive, with a high degree of innovation. However, new FDA deeming regulations as applied to NVPs could make it difficult for smaller companies to remain in the market and could discourage new companies and new product innovations from entering the market.

2019: The Vapor industry Economic Impact Study

  • The vapor industry is a dynamic part of the U.S. economy, accounting for about $24.46 billion in output or about 0.14 percent of GDP. It employs approximately 166,007 Americans who earned wages and benefits of about $7.90 billion.
  • Members of the industry and their employees paid $3.31 billion in federal, state and local taxes. This does not include state and local sales taxes or excise taxes that may apply for specific retail purchases which are estimated to total $1.67 billion.
  • Original link to the study

2019 The Impact of Electronic Cigarettes on Cigarette Smoking By Americans and Its Health and Economic Implications

  • In this study, we examined the growing use of electronic cigarettes and its implications. The wide use of e-cigarettes is a very recent development, and issues regarding their long-term effects and significance cannot be fully analyzed at this time. Using CDC and other data covering the last decade, however, we examined the relationship between the recent sharp increase in e-cigarette use among Americans and the contemporaneous acceleration in the declining rate of cigarette smoking. We found that the sharp increase in e-cigarette use across many groups can explain as much as 70 percent of the accelerating decline in smoking rates. We also found no reasonable evidential basis for concerns that e-cigarettes are a gateway to cigarette smoking. We further found that e-cigarettes are highly effective in helping people stop smoking cigarettes.
  • Finally, we analyzed the impact of the sharp increase in e-cigarette use and the accelerating decline in cigarette smoking on healthcare costs and economic productivity. We found that while e-cigarette users incur lower healthcare costs than cigarette smokers or ex-smokers, the longer lifespans of e-cigarette users and ex-smokers who used e-cigarettes to quit smoking result in higher lifetime healthcare costs. However, we also found that the value of the additional years of life associated with using e-cigarettes instead of smoking is much greater than the additional healthcare costs. Lastly, we found that the increase in e-cigarette use and the associated reduction in smoking rates results in large productivity benefits, mainly from lower rates of illness.
  • Link above is the PDF Version

2019: The Economic Impact of a Ban on Flavored Vapor Products

  • The vapor product industry is an important part of the US economy. About $9.2 billion in vapor sales lead to 166,000 jobs and $24.5 billion in economic activity. About 58,430 of these jobs are held by people working for the over 13,480 independent retail vape shops located across the country.
  • Based on independent vapor industry data, flavored vapor products account for about 85.7 percent of sales volume. Therefore, a ban on all flavored vapor products would:
    • Cause sales to fall by about $8.4 billion and the overall economy would see a $22.4 billion hit.
    • Eliminate over 151,850 jobs.

2015: How does electronic cigarette access affect adolescent smoking?

  • Understanding electronic cigarettes’ effect on tobacco smoking is a central economic and policy issue. This paper examines the causal impact of e-cigarette access on conventional cigarette use by adolescents. Regression analyses consider how state bans on e-cigarette sales to influence smoking rates among 12 to 17 year olds. Such bans yield a statistically significant 0.9 percentage point increase in recent smoking in this age group, relative to states without such bans. Results are robust to multiple specifications as well as several falsification and placebo checks. This effect is both consistent with e-cigarette access reducing smoking among minors, and large: banning electronic cigarette sales counteracts 70 percent of the downward pre-trend in cigarette smoking for a given two-year period.


2019: Federal Flavor Ban and Economic Significance

  • Senator Ron Johnson to President Trump