Yet another study: Taxing e-cigarettes pushes young adults into smoking

According to a new study,

In the United States, higher taxes on electronic nicotine delivery systems (ENDS) are associated with decreased ENDS use but increased cigarette smoking among 18-25 year-olds, with associations reversed for cigarette taxes.

That hiking taxes on e-cigarettes increases smoking is something that previous research has touched on. In San Francisco, for example, one study found that banning flavored tobacco products, including flavored e-cigarettes, doubled smoking among the youth.

E-cigarettes and traditional cigarettes are substitutes

Why is this the case? Economically speaking, cigarettes and traditional combustible tobacco products are what we call substitutes. When the price of one goes up, users substitute for another. The youth are especially more malleable according to the authors of this new study, which accounts for the big response.

For the study, the authors compared survey data on young adult smoking and vaping across states that did increase taxes on cigarette and nicotine vaping products versus those that did not. They found that increasing taxes on nicotine vaping products by $1 per milliliter was associated with a 2.5 percentage point decline in this group’s rate of daily vaping, but also a 3.7 percentage point increase in rates of recent smoking. Similarly, a $1 increase in cigarette taxes yielded a 2.5 percentage point decrease in recent smoking and an equivalent increase in daily vaping of nicotine products.

Friedman says these findings show that tax policies need nuance.

“Anyone who is going to levy a tax on one tobacco or nicotine product needs to think about the tax rates on all the others,” she said. “Because if people are substituting between products and you raise the price of one, some subset is going to switch to a less expensive option, even if they don’t like that product as much. From a public health perspective, it is important that that less expensive option is also less harmful.”

Evidence that cigarettes are more lethal than nicotine vaping products suggests that a tax that increases smoking would be worse for public health than one that increases nicotine vaping, say the researchers.

What optimal tobacco policy should look like

Given the substitutability of e-cigarettes and traditional cigarettes, and given the fact that e-cigarettes are less harmful than traditional cigarettes, economics would dictate that in order to reduce harm to public health, states and the federal government should make it easier — or less costly — for individuals to purchase e-cigarettes, at least when compared to cigarettes.

However, public policy has been moving in the opposite direction, especially when considering new efforts by the FDA to shut down Juul.

It is concerning, to say the least. Nevertheless, studies like these are still a reminder to policymakers about what optimal tobacco policy should look like if the aim is true to reduce harm.