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An empirical analysis of e-cigarette addiction

Author

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  • Xueting Deng
  • Yuqing Zheng
  • J.S. Butler

Abstract

This paper examines the role of addiction in influencing the demand for e-cigarettes using the Nielsen Retail Scanner Data and the Nielsen Consumer Panel Data between 2012 and 2017. With a comparison of a myopic addiction model, a forward-looking model, and a rational addiction model, this paper tests whether the consumption of e-cigarettes is addictive and rational. Results from both the macro data and the microdata support the rational addictiveness of e-cigarettes. Applying an OLS method and an instrumental variable method in causal inference, results show that the long-run price elasticity estimates are larger than the estimates of the short-run price elasticity of demand for e-cigarettes. Estimates of both long-run and short-run elasticities are greater than one, −1.50 and −1.05, suggesting e-cigarette demand is elastic in both the long run and short run.

Suggested Citation

  • Xueting Deng & Yuqing Zheng & J.S. Butler, 2023. "An empirical analysis of e-cigarette addiction," Journal of Applied Economics, Taylor & Francis Journals, vol. 26(1), pages 2223953-222, December.
    • Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2223953
    DOI: 10.1080/15140326.2023.2223953
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