E-cigarettes and adult smoking: Evidence from Minnesota

Abstract

NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

The Economics of Tobacco Regulation: A Comprehensive Review

“…In the data, e-cigarette purchases are rare: in an average quarter only 0.4 percent of households purchased e-cigarettes; and among ever-purchasers, the mean number purchased was 1.4 e-cigarettes, compared to 341 cigarettes per quarter. In light of the rapid growth of the market for e-cigarettes, the observed demand patterns and tax effects in this study might mainly reflect the behavior of e-cigarette experimenters Saffer et al (2019). extend this literature in their working paper by examining the first tax past on e-cigarettes in Minnesota in 2010, as well as the subsequent tax increase in 2013 that…”

The Effect of E-Cigarette Taxes on Pre-pregnancy and Prenatal Smoking

“…This is somewhat larger than the wholesale price estimate (inclusive of the tax) of $3.52 for replacement pods in Minnesota in 2012 estimated bySaffer et al (2020). This difference could reflect wholesale prices being larger in 2017 than in 2012, wholesale prices being larger in Minnesota than in Washington DC, or wholesale prices for replacement pods being different than for a broader array of e-cigarette products.…”

“…Taxes may reduce e-cigarette use by raising the relative price of the product. Indeed, three recent studies show that e-cigarette taxes are more than fully passed through to consumers (Cotti et al 2020, Allcott and Rafkin 2020, Saffer et al 2020. For example, Cotti et al (2020) estimate a pass-through rate of 1.6 using sales data over the period 2011 to 2017.…”

“…Further, a $1.00 increase in the traditional cigarette tax rate leads to a 14.2% increase in daily vaping. Saffer et al (2020) study the effect of the first e-cigarette tax adopted in the U.S.in the state of Minnesota in 2010on adult smoking. The authors show, using synthetic control methods, that Minnesota's e-cigarette tax increased smoking and reduced cessation.…”

The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data

“…A paper by Saffer et al (2020) also uses survey data, the TUS from 1992 to 2015, in conjunction with e-cigarette taxes in Minnesota (which adopted a tax in 2010 and then increased the tax from 35% to 95% in 2013) and synthetic control methods to assess how e-cigarette taxes impact adult smokers in a case study analysis. Estimates suggest that the e-cigarette tax rate increases adult smoking and reduces smoking cessation in Minnesota, relative to the synthetic control group, and imply a cross elasticity of current smoking participation with respect to ecigarette prices of 0.13.…”