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The Effect of E-cigarette Taxes on Substance Use

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Listed:
  • Dhaval M. Dave
  • Yang Liang
  • Johanna Catherine Maclean
  • Caterina Muratori
  • Joseph J. Sabia

Abstract

Public health advocates warn that the rapid growth of legal markets for electronic nicotine delivery systems (ENDS) may generate a “gateway” to marijuana and harder drug consumption, particularly among teenagers. This study explores the effects of ENDS taxes on substance use. We find that a one-dollar increase in ENDS taxes (2023$) is associated with a 1.0 to 1.5 percentage point decline in teen marijuana use and in co-use of ENDS and marijuana. This result is consistent with e-cigarettes and marijuana being economic complements. We also find that youth responses to ENDS taxes, in terms of their ENDS use and spillovers into marijuana use, appear to moderate over the longer term. We find no evidence that ENDS taxes affect drug treatment admissions or consumption of illicit drugs other than marijuana such as cocaine, methamphetamine, or opioids.

Suggested Citation

  • Dhaval M. Dave & Yang Liang & Johanna Catherine Maclean & Caterina Muratori & Joseph J. Sabia, 2024. "The Effect of E-cigarette Taxes on Substance Use," NBER Working Papers 32302, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32302
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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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