2022
DOI: 10.1257/pol.20200805
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Optimal Regulation of E-cigarettes: Theory and Evidence

Abstract: We model optimal e-cigarette regulation and estimate key parameters. Using tax changes and scanner data, we estimate relatively elastic demand. A demographic shift-share identification strategy suggests limited substitution between e-cigarettes and cigarettes. We field a new survey of public health experts who report that vaping is more harmful than previously believed. In our model’s average Monte Carlo simulation, these results imply optimal e-cigarette taxes are higher than recent norms. However, e-cigarett… Show more

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Cited by 20 publications
(10 citation statements)
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“…Three studies found evidence that higher e‐cigarette tax rates reduce e‐cigarette use and increase cigarette use for adults (Pesko et al., 2020), young adults (Friedman & Pesko, 2022), and teenagers (Abouk et al., 2023). From sales data, studies have found evidence that e‐cigarette taxes reduce e‐cigarette sales (Allcott & Rafkin, 2022; Cotti et al., 2022), with one of these also finding evidence that e‐cigarette taxes increase cigarette sales (Cotti et al., 2022) and the other finding more limited evidence for this relationship (Allcott & Rafkin, 2022). , Recent research has shown that Minnesota's 2013 e‐cigarette tax increase reduces adult smoking cessation (Saffer et al., 2020) and increases teen smoking (Pesko & Warman, 2022).…”
Section: Background and Related Literaturementioning
confidence: 99%
“…Three studies found evidence that higher e‐cigarette tax rates reduce e‐cigarette use and increase cigarette use for adults (Pesko et al., 2020), young adults (Friedman & Pesko, 2022), and teenagers (Abouk et al., 2023). From sales data, studies have found evidence that e‐cigarette taxes reduce e‐cigarette sales (Allcott & Rafkin, 2022; Cotti et al., 2022), with one of these also finding evidence that e‐cigarette taxes increase cigarette sales (Cotti et al., 2022) and the other finding more limited evidence for this relationship (Allcott & Rafkin, 2022). , Recent research has shown that Minnesota's 2013 e‐cigarette tax increase reduces adult smoking cessation (Saffer et al., 2020) and increases teen smoking (Pesko & Warman, 2022).…”
Section: Background and Related Literaturementioning
confidence: 99%
“…Given that prior studies have overwhelmingly supported that e-cigarettes and cigarettes are economic substitutes [94][95][96], another worry is that the implementation of legislation that only targets ENP products, including taxation [53] and vape-free laws [46], may increase combustible cigarette use and sales. Pesko et al [51] estimated that a US$1.00 increase in tax per vaping fluid ml would increase daily smoking propensity by 0.6 percentage points (ppts) among US adults.…”
Section: Implications For Practitioners and Policymakersmentioning
confidence: 99%
“…In one of the most comprehensive studies on optimal e-cigarette regulation, Allcott and Rafkin (2022) find that e-cigarette demand is elastic with respect to taxes, but cannot reject the null of zero substitution between traditional and e-cigarettes. Their study, however, remains largely silent on MLPAs as a regulatory tool.…”
Section: Introductionmentioning
confidence: 99%