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Re‐exploring the early relationship between teenage cigarette and e‐cigarette use using price and tax changes

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  • Michael F. Pesko
  • Casey Warman

Abstract

In 2016, the Surgeon General used longitudinal cohort studies to conclude that youth e‐cigarette use is strongly associated with cigarette use. We re‐evaluate data from the period of time before the writing of the Surgeon General report, using quasi‐experimental methods, and reach the opposite conclusion. We study contemporaneous and intertemporal effects of e‐cigarette and cigarette price and tax changes. Our price variation comes from 35,000 retailers participating in the Nielsen Retail Scanner data system. We match price and tax variation to survey data on current use of e‐cigarettes and cigarettes for over 94,000 students between grades 6 and 12 in the National Youth Tobacco Survey (NYTS) for years 2011–2015. We find evidence that e‐cigarettes and cigarettes are same‐period economic substitutes. Coefficient estimates (while imprecisely estimated) also suggest potentially large positive effects of past e‐cigarette prices on current cigarette use, indicating intertemporal economic substitution. Our findings raise doubts about the conclusion of government‐sponsored reports that e‐cigarettes and cigarettes are strongly positively associated. We recommend revisiting and possibly amending this conclusion.

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  • Michael F. Pesko & Casey Warman, 2022. "Re‐exploring the early relationship between teenage cigarette and e‐cigarette use using price and tax changes," Health Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 137-153, January.
  • Handle: RePEc:wly:hlthec:v:31:y:2022:i:1:p:137-153
    DOI: 10.1002/hec.4439
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    1. Beenstock, Michael & Rahav, Giora, 2002. "Testing Gateway Theory: do cigarette prices affect illicit drug use?," Journal of Health Economics, Elsevier, vol. 21(4), pages 679-698, July.
    2. Pesko, Michael F. & Currie, Janet M., 2019. "E-cigarette minimum legal sale age laws and traditional cigarette use among rural pregnant teenagers," Journal of Health Economics, Elsevier, vol. 66(C), pages 71-90.
    3. Benjamin Hansen & Joseph J. Sabia & Daniel I. Rees, 2017. "Have Cigarette Taxes Lost Their Bite? New Estimates of the Relationship between Cigarette Taxes and Youth Smoking," American Journal of Health Economics, MIT Press, vol. 3(1), pages 60-75, Winter.
    4. Abouk, Rahi & Adams, Scott, 2017. "Bans on electronic cigarette sales to minors and smoking among high school students," Journal of Health Economics, Elsevier, vol. 54(C), pages 17-24.
    5. Henry Saffer & Daniel Dench & Michael Grossman & Dhaval Dave, 2020. "E-cigarettes and adult smoking: Evidence from Minnesota," Journal of Risk and Uncertainty, Springer, vol. 60(3), pages 207-228, June.
    6. Bo Feng & Michael F. Pesko, 2019. "Revisiting the Effects of Tobacco Retailer Compliance Inspections on Youth Tobacco Use," American Journal of Health Economics, MIT Press, vol. 5(4), pages 509-532, Fall.
    7. Cotti, Chad & Courtemanche, Charles & Maclean, Joanna Catherine & Nesson, Erik & Pesko, Michael F. & Tefft, Nathan W., 2022. "The effects of e-cigarette taxes on e-cigarette prices and tobacco product sales: Evidence from retail panel data," Journal of Health Economics, Elsevier, vol. 86(C).
    8. Yuqing Zheng & Chen Zhen & Daniel Dench & James M. Nonnemaker, 2017. "U.S. Demand for Tobacco Products in a System Framework," Health Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 1067-1086, August.
    9. Friedman, Abigail S., 2015. "How does electronic cigarette access affect adolescent smoking?," Journal of Health Economics, Elsevier, vol. 44(C), pages 300-308.
    10. Rahi Abouk & Scott Adams & Bo Feng & Johanna Catherine Maclean & Michael F. Pesko, 2023. "The effect of e‐cigarette taxes on pre‐pregnancy and prenatal smoking," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(4), pages 908-940, September.
    11. Michael F. Pesko & Charles J. Courtemanche & Johanna Catherine Maclean, 2020. "The effects of traditional cigarette and e-cigarette tax rates on adult tobacco product use," Journal of Risk and Uncertainty, Springer, vol. 60(3), pages 229-258, June.
    12. Benjamin Hansen & Joseph J. Sabia & Daniel I. Rees, 2017. "Have Cigarette Taxes Lost Their Bite? New Estimates of the Relationship between Cigarette Taxes and Youth Smoking," American Journal of Health Economics, University of Chicago Press, vol. 3(1), pages 60-75, Winter.
    13. Bo Feng & Michael F. Pesko, 2019. "Revisiting the Effects of Tobacco Retailer Compliance Inspections on Youth Tobacco Use," American Journal of Health Economics, University of Chicago Press, vol. 5(4), pages 509-532, Fall.
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    Cited by:

    1. Jeff DeSimone & Daniel Grossman & Nicolas Ziebarth, 2023. "Regression Discontinuity Evidence on the Effectiveness of the Minimum Legal E-cigarette Purchasing Age," American Journal of Health Economics, University of Chicago Press, vol. 9(3), pages 461-485.
    2. Chad D. Cotti & Charles J. Courtemanche & Yang Liang & Johanna Catherine Maclean & Erik T. Nesson & Joseph J. Sabia, 2024. "The Effect of E-Cigarette Flavor Bans on Tobacco Use," NBER Working Papers 32535, National Bureau of Economic Research, Inc.
    3. Abouk, Rahi & Courtemanche, Charles & Dave, Dhaval & Feng, Bo & Friedman, Abigail S. & Maclean, Johanna Catherine & Pesko, Michael F. & Sabia, Joseph J. & Safford, Samuel, 2023. "Intended and unintended effects of e-cigarette taxes on youth tobacco use," Journal of Health Economics, Elsevier, vol. 87(C).
    4. Cotti, Chad & Courtemanche, Charles & Maclean, Joanna Catherine & Nesson, Erik & Pesko, Michael F. & Tefft, Nathan W., 2022. "The effects of e-cigarette taxes on e-cigarette prices and tobacco product sales: Evidence from retail panel data," Journal of Health Economics, Elsevier, vol. 86(C).
    5. Salvatore Barbaro & Nathalie Neu-Yanders, 2022. "Tobacco control and optimal taxation in a changing European market landscape," Working Papers 2204, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.

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    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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