IDEAS home Printed from https://ideas.repec.org/a/aea/aejpol/v14y2022i4p1-50.html
   My bibliography  Save this article

Optimal Regulation of E-cigarettes: Theory and Evidence

Author

Listed:
  • Hunt Allcott
  • Charlie Rafkin

Abstract

We model optimal e-cigarette regulation and estimate key parameters. Using tax changes and scanner data, we estimate relatively elastic demand. A demographic shift-share identification strategy suggests limited substitution between e-cigarettes and cigarettes. We field a new survey of public health experts who report that vaping is more harmful than previously believed. In our model's average Monte Carlo simulation, these results imply optimal e-cigarette taxes are higher than recent norms. However, e-cigarette subsidies may be optimal if vaping is a stronger substitute for smoking and is safer than our experts report, or if consumers overestimate the health harms from vaping.

Suggested Citation

  • Hunt Allcott & Charlie Rafkin, 2022. "Optimal Regulation of E-cigarettes: Theory and Evidence," American Economic Journal: Economic Policy, American Economic Association, vol. 14(4), pages 1-50, November.
    • Handle: RePEc:aea:aejpol:v:14:y:2022:i:4:p:1-50
    DOI: 10.1257/pol.20200805
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/pol.20200805
    Download Restriction: no
    File URL: https://doi.org/10.3886/E146462V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/pol.20200805.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/pol.20200805.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/pol.20200805?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Frank A. Sloan, 2024. "Subjective beliefs, health, and health behaviors," Journal of Risk and Uncertainty, Springer, vol. 69(2), pages 105-144, October.
    2. Cotti, Chad D. & Courtemanche, Charles J. & Liang, Yang & Maclean, Johanna Catherine & Nesson, Erik T. & Sabia, Joseph J., 2024. "The Effect of E-Cigarette Flavor Bans on Tobacco Use," Working Papers 114, Wake Forest University, Economics Department.
    3. Salvatore Barbaro & Nathalie Neu-Yanders, 2022. "Tobacco control and optimal taxation in a changing European market landscape," Working Papers 2204, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    4. Michael F. Pesko, 2023. "Effects of e-cigarette minimum legal sales ages on youth tobacco use in the United States," Journal of Risk and Uncertainty, Springer, vol. 66(3), pages 261-277, June.
    5. Henry Saffer & Selen Ozdogan & Michael Grossman & Daniel L. Dench & Dhaval M. Dave, 2024. "Comprehensive E-cigarette Flavor Bans and Tobacco Use among Youth, Young Adults, and Adults," NBER Working Papers 32534, National Bureau of Economic Research, Inc.
    6. Michael E. Darden, 2024. "Optimal e-cigarette policy when preferences and internalities are correlated," Journal of Risk and Uncertainty, Springer, vol. 68(2), pages 107-131, April.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejpol:v:14:y:2022:i:4:p:1-50. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.