Translations:ENDS Taxes/16/en

• We provide some of the first evidence on how e-cigarette taxes impact adult smokers, exploiting the large tax increase in Minnesota. That state was the first to impose a tax on e-cigarettes by extending the definition of tobacco products to include e-cigarettes. This tax, which is 95% of the wholesale price, provides a plausibly exogenous deterrent to e-cigarette use.
• Our results suggest that in the sample period about 32,400 additional adult smokers would have quit smoking in Minnesota in the absence of the tax. If this tax were imposed on a national level about 1.8 million smokers would be deterred from quitting in a ten year period. The taxation of e-cigarettes at the same rate as cigarettes could deter more than 2.75 million smokers nationally from quitting in the same period.
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• Citation: Saffer, Henry and Grossman, Michael and Dench, Daniel and Dave, Dhaval, E-Cigarettes and Adult Smoking: Evidence from Minnesota (December 12, 2019). Available at SSRN: https://ssrn.com/abstract=3503054 or http://dx.doi.org/10.2139/ssrn.3503054
• Acknowledgement: This project was funded by grant number R01-DA039968 entitled “The Economics of Electronic Nicotine Delivery Systems: Advertising and Outcomes”, from the National Institute of Health to the National Bureau of Economic Research, Inc. This study employs data from the A.C. Nielsen Company, which was purchased from the Kilts Center of the University of the Chicago Booth School of Business.