IDEAS home Printed from https://ideas.repec.org/a/eee/indorg/v99y2025ics0167718725000141.html
   My bibliography  Save this article

Flavorants and addiction: An empirical analysis of cigarette bans and taxation

Author

Listed:
  • Chen, Jiawei
  • Reinhardt, Colin

Abstract

We evaluate the proposed FDA menthol cigarette ban using aggregate-level retail data and micro-level household data. The model incorporates addiction and household heterogeneity, with a focus on low-income households and the Black community, who consume menthol cigarettes the most. The ban reduces cigarette usage by 12.6% and the Black smoking rate by 35%, while demand for e-cigarettes and cessation products increases by 4.9% and 1.7%, respectively. A $1.02-per-pack cigarette sales tax is as effective as the menthol cigarette ban in reducing cigarette usage, while resulting in a smaller reduction in consumer surplus across most demographic groups, especially Black Americans. Including non-tobacco flavored e-cigarettes in the ban reduces cigarette consumption similarly, while e-cigarette usage decreases by 46%.

Suggested Citation

  • Chen, Jiawei & Reinhardt, Colin, 2025. "Flavorants and addiction: An empirical analysis of cigarette bans and taxation," International Journal of Industrial Organization, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:indorg:v:99:y:2025:i:c:s0167718725000141
    DOI: 10.1016/j.ijindorg.2025.103147
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167718725000141
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijindorg.2025.103147?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Demand estimation; Consumer heterogeneity; Tobacco consumption; Addiction; Public health intervention; Policy evaluation;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:indorg:v:99:y:2025:i:c:s0167718725000141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505551 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.