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The Effect of E-cigarette Taxes on Substance Use

Author

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 is the first to explore the effects of ENDS taxes on substance use. We find that a one-dollar increase in ENDS taxes (2019$) is associated with a 1-to-2 percentage point decline in teen marijuana use and a 0.8 percentage point reduction in adult marijuana use. This result is consistent with e-cigarettes and marijuana being economic complements. 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 over this sample period.

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
    Note: CH EH LE PE
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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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