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*In late February 2020, the U.S. House of Representatives approved a national e-cigarette tax proportional to the federal cigarette tax (House Bill 2339 2020). The bill specifies a tax rate of $50.33 per 1,810 milligrams of nicotine (or $0.028 per milligram). JUUL pods at the time of writing contain 59 milligrams/ml (at 5% nicotine volume). Assuming this conversion, we simulate that, if this bill were to become law, the tax could raise e-cigarette prices by $2.36 per ml ($0.0278 x 59 x 1.44 using Table 3), would reduce NRSD e-cigarette purchases by 1,784 ml per 100,000 adults , and would increase NRSD cigarette pack purchases by 26,736 packs per 100,000 adults. Our rate of substitution would be halved when compensating for the NRSD capturing roughly twice the share of cigarette sales than e-cigarette sales, which brings us to a substitution rate of one pod = 7.5 packs. | *In late February 2020, the U.S. House of Representatives approved a national e-cigarette tax proportional to the federal cigarette tax (House Bill 2339 2020). The bill specifies a tax rate of $50.33 per 1,810 milligrams of nicotine (or $0.028 per milligram). JUUL pods at the time of writing contain 59 milligrams/ml (at 5% nicotine volume). Assuming this conversion, we simulate that, if this bill were to become law, the tax could raise e-cigarette prices by $2.36 per ml ($0.0278 x 59 x 1.44 using Table 3), would reduce NRSD e-cigarette purchases by 1,784 ml per 100,000 adults , and would increase NRSD cigarette pack purchases by 26,736 packs per 100,000 adults. Our rate of substitution would be halved when compensating for the NRSD capturing roughly twice the share of cigarette sales than e-cigarette sales, which brings us to a substitution rate of one pod = 7.5 packs. | ||
*A limitation of our study is the reliance on e-cigarettes sold through retail stores, so we cannot capture e-cigarettes sold through specialty vape shops and online. However, e-cigarette taxes are collected for both online and vape shop purchases in the same way they are collected in retail stores, so we are unaware of any financial incentive to change shopping venue in response to an e-cigarette tax. | *A limitation of our study is the reliance on e-cigarettes sold through retail stores, so we cannot capture e-cigarettes sold through specialty vape shops and online. However, e-cigarette taxes are collected for both online and vape shop purchases in the same way they are collected in retail stores, so we are unaware of any financial incentive to change shopping venue in response to an e-cigarette tax. | ||
===2020: [https://www.nber.org/papers/w26724 The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data]=== | |||
*We simulate that for every one standard e-cigarette pod (a device that contains liquid nicotine in e-cigarettes) of 0.7 ml no longer purchased as a result of an e-cigarette tax, the same tax increases traditional cigarettes purchased by 6.2 extra packs. | |||
*[https://www.nber.org/system/files/working_papers/w26724/w26724.pdf PDF Version] | |||
*Citation: Cotti, C., Courtemanche, C., Maclean, J. C., Nesson, E., Pesko, M., & Tefft, N. (2020). The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data. doi:10.3386/w26724 | |||
*Acknowledgement: Research reported in this publication was supported by the National Institute on Drug Abuse of the National Institutes of Health under Award Number R01DA045016 (PI: Michael Pesko). | |||
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*Increasing taxes on reduced-risk products could function to deter smokers from switching to them. | *Increasing taxes on reduced-risk products could function to deter smokers from switching to them. | ||
*To reduce smoking and to save millions of lives, tobacco harm reduction in the form of cigarette substitution with low-risk products appears to be a promising path. These products, although not completely risk-free, offer an alternative to quit or die. In consideration of the available evidence, advice to tobacco smokers should include trying substitute products. The obvious fact so often overlooked is that smoking is rewarding and people like to do it. Giving smokers an alternative with efficient nicotine delivery means that they might prefer one of these products over cigarettes. | *To reduce smoking and to save millions of lives, tobacco harm reduction in the form of cigarette substitution with low-risk products appears to be a promising path. These products, although not completely risk-free, offer an alternative to quit or die. In consideration of the available evidence, advice to tobacco smokers should include trying substitute products. The obvious fact so often overlooked is that smoking is rewarding and people like to do it. Giving smokers an alternative with efficient nicotine delivery means that they might prefer one of these products over cigarettes. | ||
===2019: [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3503054 E-Cigarettes and Adult Smoking: Evidence from Minnesota]=== | |||
* | ===2019: [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3503054 2019: E-Cigarettes and Adult Smoking: Evidence from Minnesota]=== | ||
*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. | |||
*[https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3503054_code35407.pdf?abstractid=3503054&mirid=1&type=2 PDF Version] | |||
*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. | |||
===2019 [https://www.nber.org/papers/w26126 The Effect of E-Cigarette Taxes on Pre-pregnancy and Prenatal Smoking]=== | ===2019: [https://www.nber.org/papers/w26126 The Effect of E-Cigarette Taxes on Pre-pregnancy and Prenatal Smoking]=== | ||
*We show that e-cigarette taxes increase pre-pregnancy smoking, increase prenatal smoking, and lower smoking cessation during pregnancy. These findings imply that e-cigarettes and traditional cigarettes are substitutes among pregnant women. | *We show that e-cigarette taxes increase pre-pregnancy smoking, increase prenatal smoking, and lower smoking cessation during pregnancy. These findings imply that e-cigarettes and traditional cigarettes are substitutes among pregnant women. | ||
* [https://www.nber.org/system/files/working_papers/w26126/revisions/w26126.rev0.pdf PDF Version] | |||
*Citation: The Effect of E-Cigarette Taxes on Pre-Pregnancy and Prenatal Smoking, and Birth Outcomes - Rahi Abouk, Scott Adams, Bo Feng, Johanna Catherine Maclean, and Michael F. Pesko, NBER Working Paper No. 26126, July 2019, JEL No. I12 | |||
*Acknowledgements: Research reported in this publication was supported by the National Institute on Drug Abuse of the National Institutes of Health under Award Number R01DA045016 (PI: Michael Pesko). | |||
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===2004: [https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1448232/ Poor Smokers, Poor Quitters, and Cigarette Tax Regressivity]=== | ===2004: [https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1448232/ Poor Smokers, Poor Quitters, and Cigarette Tax Regressivity]=== | ||
*The fact that the poor smoke more than the rich means that they either will be paying more in taxes or will be “forced” to cut back more. Higher cigarette taxes cause hardship among some poor individuals who find it difficult to quit. In the drive for better public health, we should acknowledge the price paid. Standard principles for assessing the equity of taxes should not be forgotten. | *The fact that the poor smoke more than the rich means that they either will be paying more in taxes or will be “forced” to cut back more. Higher cigarette taxes cause hardship among some poor individuals who find it difficult to quit. In the drive for better public health, we should acknowledge the price paid. Standard principles for assessing the equity of taxes should not be forgotten. | ||
='''Resources'''= | ='''Resources'''= | ||
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