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Mostly Harmless Regulation? Electronic Cigarettes, Public Policy and Consumer Welfare

Author

Listed:
  • Donald S. Kenkel
  • Sida Peng
  • Michael F. Pesko
  • Hua Wang

Abstract

Electronic cigarettes are a less harmful alternative to combustible cigarettes. We analyze data on e-cigarette choices in an online experimental market. Our data and mixed logit model capture two sources of consumer optimization errors: over-estimates of the relative risks of e-cigarettes; and present bias. Our novel data and policy analysis make three contributions. First, our predictions about e-cigarette use under counter-factual policy scenarios provide new information about current regulatory tradeoffs. Second, we provide empirical evidence about the role consumer optimization errors play in tobacco product choices. Third, we contribute to behavioral welfare analysis of policies that address individual optimization errors.

Suggested Citation

  • Donald S. Kenkel & Sida Peng & Michael F. Pesko & Hua Wang, 2017. "Mostly Harmless Regulation? Electronic Cigarettes, Public Policy and Consumer Welfare," NBER Working Papers 23710, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23710
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    References listed on IDEAS

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    Cited by:

    1. repec:eme:aheszz:s0731-219920170000025005 is not listed on IDEAS
    2. Philip DeCicca & Donald Kenkel & Feng Liu & Hua Wang, 2017. "Behavioral Welfare Economics and FDA Tobacco Regulations," Advances in Health Economics and Health Services Research,in: Human Capital and Health Behavior, volume 25, pages 143-179 Emerald Publishing Ltd.
    3. Itzik Fadlon & Torben Heien Nielsen, 2017. "Family Health Behaviors," NBER Working Papers 24042, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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