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Intended and Unintended Effects of E-cigarette Taxes on Youth Tobacco Use

Author

Listed:
  • Abouk, Rahi

    (William Paterson University)

  • Courtemanche, Charles

    (University of Kentucky)

  • Dave, Dhaval M.

    (Bentley University)

  • Feng, Bo

    (American Institutes for Research)

  • Friedman, Abigail S.

    (Yale University)

  • Maclean, J. Catherine

    (Temple University)

  • Pesko, Michael

    (University of Missouri)

  • Sabia, Joseph J.

    (San Diego State University)

  • Safford, Samuel

    (San Diego State University)

Abstract

Over the past decade, rising youth use of e-cigarettes and other electronic nicotine delivery systems (ENDS) has contributed to aggressive regulation by state and local governments. Between 2010 and mid-2019, ten states and two large counties adopted ENDS taxes. We use two large national surveys (Monitoring the Future and the Youth Risk Behavior Surveillance System) to estimate the impact of ENDS taxes on youth tobacco use. We find that ENDS taxes reduce youth ENDS consumption, with estimated ENDS tax elasticities of -0.06 to -0.21. However, we estimate sizable positive cigarette cross-tax effects, suggesting economic substitution between cigarettes and ENDS for youth. These substitution effects are particularly large for frequent cigarette smoking. We conclude that the unintended effects of ENDS taxation may considerably undercut or even outweigh any public health gains.

Suggested Citation

  • Abouk, Rahi & Courtemanche, Charles & Dave, Dhaval M. & Feng, Bo & Friedman, Abigail S. & Maclean, J. Catherine & Pesko, Michael & Sabia, Joseph J. & Safford, Samuel, 2022. "Intended and Unintended Effects of E-cigarette Taxes on Youth Tobacco Use," IZA Discussion Papers 15655, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp15655
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    Cited by:

    1. Chad D. Cotti & Charles J. Courtemanche & Yang Liang & Johanna Catherine Maclean & Erik T. Nesson & Joseph J. Sabia, 2024. "The Effect of E-Cigarette Flavor Bans on Tobacco Use," NBER Working Papers 32535, National Bureau of Economic Research, Inc.
    2. Piyush Anand & Vrinda Kadiyali, 2024. "Frontiers: Smoke and Mirrors: Impact of E-cigarette Taxes on Underage Social Media Posting," Marketing Science, INFORMS, vol. 43(3), pages 479-487, May.
    3. Cotti, Chad & Courtemanche, Charles & Maclean, Joanna Catherine & Nesson, Erik & Pesko, Michael F. & Tefft, Nathan W., 2022. "The effects of e-cigarette taxes on e-cigarette prices and tobacco product sales: Evidence from retail panel data," Journal of Health Economics, Elsevier, vol. 86(C).
    4. 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.
    5. 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.
    6. Garrouste, Clémentine & Juet, Arthur & Samson, Anne-Laure, 2023. "Direct and crowding-out effects of a Hepatitis B vaccination campaign," Economics & Human Biology, Elsevier, vol. 51(C).
    7. Henry Saffer & Selen Ozdogan & Michael Grossman & Daniel L. Dench & Dhaval M. Dave, 2024. "Comprehensive E-cigarette Flavor Bans and Tobacco Use among Youth and Adults," NBER Working Papers 32534, National Bureau of Economic Research, Inc.
    8. Barnes, Stephen & Joshi, Swarup & Terrell, Dek, 2023. "Disasters and health insurance: Evidence from Louisiana," Economic Modelling, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    electronic nicotine delivery systems (ENDS); e-cigarettes; vaping; cigarettes; smoking; taxes; youth;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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