Investigating the Impact of E-Cigarette Price and Tax on E-Cigarette Use Behavior.

INTRODUCTION: Although the relationship between tax and price and youth cigarette use is well established, little is known about these associations and youth e-cigarette use. This research examines U.S. youth sensitivity to changes in e-cigarette prices and tax using standardized measures of e-cigarette taxes and prices. METHODS: This analysis uses national data on past 30-day use and the number of days using e-cigarettes (i.e., the intensity of use) from the repeat cross-sectional 2015-2019 Youth Risk Behavior Survey, in combination with inflation-adjusted standardized e-cigarette price and tax data to understand whether changes in e-cigarette price and tax were associated with changes in e-cigarette use. Two-part demand regression models controlling for demographics and e-cigarette restriction policies were conducted to calculate price and tax elasticities of demand, in addition to $0.50 and $1.00 price and tax increase simulations. RESULTS: Increased e-cigarette prices and taxes were associated with significant reductions in past 30-day use. Prices were also significantly associated with decreases in the intensity of use. A $0.50 and $1.00 tax increase leads to a 6.3% and 12.2% decrease in past 30-day use and a 4.7% and 9.3% decrease in intensity, respectively. A $0.50 and $1.00 price increase leads to a 4.1% and 8.2% decrease in past 30-day use and a 4.2% and 8.3% decrease in intensity, respectively. CONCLUSIONS: Higher prices and taxes reduce youth current e-cigarette use and days using e-cigarettes. Policies increasing e-cigarette prices, such as excise taxes, can reduce youth current e-cigarette use and days using e-cigarettes.

State tobacco control expenditures and tax paid cigarette sales.

This research is the first nationally representative study to examine the relationship between actual state-level tobacco control spending in each of the 5 CDC's Best Practices for Comprehensive Tobacco Control Program categories and cigarette sales. We employed several alternative two-way fixed-effects regression techniques to estimate the determinants of cigarette sales in the United States for the years 2008-2012. State spending on tobacco control was found to have a negative and significant impact on cigarette sales in all models that were estimated. Spending in the areas of cessation interventions, health communication interventions, and state and community interventions were found to have a negative impact on cigarette sales in all models that were estimated, whereas spending in the areas of surveillance and evaluation, and administration and management were found to have negative effects on cigarette sales in only some models. Our models predict that states that spend up to seven times their current levels could still see significant reductions in cigarette sales. The findings from this research could help inform further investments in state tobacco control programs.

Effect of the Smoke-Free Illinois Act on casino admissions and revenue.

OBJECTIVE: As part of the Smoke-Free Illinois Act, smoking on the gambling floors of all commercial casinos in Illinois became prohibited. This study examined the effects of the Smoke-Free Illinois Act on casino admissions per-capita and real per-capita adjusted gross receipts using 18 years of data (10 years before and 8 years after the Illinois law went into effect). METHODS: We employed a difference-in-difference regression technique using monthly data for the states of Illinois, Indiana, Iowa and Missouri and control for numerous determinants expected to affect casino admissions and revenue. RESULTS: The Smoke-free Illinois Act was found not to be a statistically significant determinant of per-capita casino admissions and of real per-capita gross adjusted receipts in all the models we estimated. CONCLUSIONS: The estimates from this study clearly indicated that the Illinois law that banned smoking in casinos has had no significant negative economic consequences for casinos in terms of per-capita admissions or revenues.

Graphic Warning Labels and the Cost Savings from Reduced Smoking among Pregnant Women.

Introduction: The U.S. Food and Drug Administration (FDA) has estimated the economic impact of Graphic Warning Labels (GWLs). By omitting the impact on tobacco consumption by pregnant women, the FDA analysis underestimates the economic benefits that would occur from the proposed regulations. There is a strong link between the occurrence of low birth weight babies and smoking while pregnant. Low birth weight babies in turn generate much higher hospital costs than normal birth weight babies. This study aims to fill the gap by quantifying the national hospital cost savings from the reductions in prenatal smoking that will arise if GWLs are implemented in the U.S. Data and Methods: This study uses several data sources. It uses Natality Data from the National Vital Statistics System of the National Center for Health Statistics (NCHS) in 2013 to estimate the impact of prenatal smoking on the likelihood of having a low-birth-weight baby, controlling for socio-economic and demographic characteristics as well as medical and non-medical risk factors. Using these estimates, along with the estimates of Huang et al. (2014) regarding the effect of GWLs on smoking, we calculate the change in the number of LBW (low birth weight) babies resulting from decreased prenatal smoking due to GWLs. Using this estimated change and the estimates from Russell et al. (2007) and AHRQ (2013) on the excess hospital costs of LBW babies, we calculate cost saving that arises from reduced prenatal smoking in response of GWLs. Results and Conclusions: Our results indicated that GWLs for this population could lead to hospital cost savings of 1.2 billion to 2.0 billion dollars over a 30 year horizon.

A comparison of alternative methods for measuring cigarette prices.

BACKGROUND: Government agencies, public health organisations and tobacco control researchers rely on accurate estimates of cigarette prices for a variety of purposes. Since the 1950s, the Tax Burden on Tobacco (TBOT) has served as the most widely used source of this price data despite its limitations. PURPOSE: This paper compares the prices and collection methods of the TBOT retail-based data and the 2003 and 2006/2007 waves of the population-based Tobacco Use Supplement to the Current Population Survey (TUS-CPS). METHODS: From the TUS-CPS, we constructed multiple state-level measures of cigarette prices, including weighted average prices per pack (based on average prices for single-pack purchases and average prices for carton purchases) and compared these with the weighted average price data reported in the TBOT. We also constructed several measures of tax avoidance from the TUS-CPS self-reported data. RESULTS: For the 2003 wave, the average TUS-CPS price was 71 cents per pack less than the average TBOT price; for the 2006/2007 wave, the difference was 47 cents. TUS-CPS and TBOT prices were also significantly different at the state level. However, these differences varied widely by state due to tax avoidance opportunities, such as cross-border purchasing. CONCLUSIONS: The TUS-CPS can be used to construct valid measures of cigarette prices. Unlike the TBOT, the TUS-CPS captures the effect of price-reducing marketing strategies, as well as tax avoidance practices and non-traditional types of purchasing. Thus, self-reported data like TUS-CPS appear to have advantages over TBOT in estimating the 'real' price that smokers face.

The economics of tobacco control: evidence from the International Tobacco Control (ITC) Policy Evaluation Project.

Over the past few decades, the importance of economic research in advancing tobacco control policies has become increasingly clear. Extensive research has demonstrated that increasing tobacco taxes and prices is the single most cost-effective tobacco control measure. The research contained in this supplement adds to this evidence and provides new insights into how smokers respond to tax and price changes using the rich data on purchase behaviours, brand choices, tax avoidance and evasion, and tobacco use collected systematically and consistently across countries and over time by the International Tobacco Control (ITC) Project. The findings from this research will help inform policymakers, public health professionals, advocates, and others seeking to maximise the public health and economic benefits from higher taxes.

Economic impact of a noncomprehensive smoke-free air law.

BACKGROUND: Many stakeholders were interested in the potential economic impact of Pennsylvania's 2008 Clean Indoor Air Act (CIAA). This study focused on the examination of economic change subsequent to CIAA and, because CIAA allows certain venue exemptions among eating and drinking establishments, if the allowance of exemptions influenced that impact. Policy analysis. Prais-Winsten regressions were employed to assess effects of CIAA and law exemptions on county-level quarterly taxable sales in restaurants and drinking establishments. Regressions controlled for general economic activity, trends in eating/drinking establishment sales, seasonality, and county characteristics. FINDINGS: Across models, CIAA had no significant negative effects on taxable sales in full-/limited-service restaurants or drinking establishments and some positive effects. CIAA exemptions for drinking establishments do not offer a clear economic benefit. Restaurant and drinking establishment taxable sales were strongly related to overall economic conditions and seasonality. CONCLUSION: After controlling for confounding factors, and consistent with the weight of the evidence from literature on the economic impact of smoke-free policies, our study concludes that the Pennsylvania CIAA had no negative effects on per capita restaurant and drinking establishment taxable sales. High rates of drinking establishment exemptions were not economically beneficial. This study can inform efforts to make smoke-free laws more comprehensive.

Differential impact of tobacco control policies on youth sub-populations.

BACKGROUND: While previous studies have demonstrated the efficacy of tobacco control interventions in reducing tobacco use among youth overall, there have been very few studies that examine the potential differential impact of tobacco control policies on various youth subgroups, defined by socio-economic status (SES), race/ethnicity, and gender. OBJECTIVE: We examined the relationship between state-level cigarette prices and smoke-free air laws and youth smoking prevalence and intensity for various youth sub-populations in the United States. METHODS: We estimated a 2-part model of cigarette demand using data from the 1991 through 2010 nationally representative surveys of 8th-, 10th-, and 12th-grade students as part of the Monitoring the Future project. FINDINGS: We found that real cigarette prices are strong determinants of youth smoking. Blacks, females, Hispanics, and low-SES subpopulations are found to have a larger price response with respect to smoking prevalence than the full sample. Smoke-free air laws are found to have a negative effect on smoking prevalence for the full sample and for the male, white, and high-SES sub-populations. CONCLUSIONS: This research concludes that higher cigarette prices will reduce smoking prevalence rates of Blacks, Hispanics, females, and low-SES subpopulations faster than the overall youth population and other youth sub-populations. Moreover, this research concludes that smoke-free air laws will reduce smoking prevalence for the overall youth population with the largest reductions in high SES and male subpopulations.

Menthol and non-menthol smoking: the impact of prices and smoke-free air laws.

AIMS: To examine the relationship between menthol and non-menthol prices and smoke-free air laws and the choice between menthol and non-menthol cigarettes among current smokers. DESIGN, SETTING AND PARTICIPANTS: Data were extracted from the nationally representative (USA) 2003 and 2006/07 Tobacco Use Supplements to the Current Population Survey. A total of 57,383 adult smokers (aged 18+) were examined. MEASUREMENTS: A regression model was used to estimate the probability of being a menthol smoker conditional on being a current smoker who had a distinct preference for either non-menthol or menthol cigarettes. Cigarette prices, smoke-free air laws and socio-economic and demographic characteristics were examined as covariates. FINDINGS: The prices of menthol and non-menthol cigarettes were associated with the choice between menthol and non-menthol cigarettes. However, smokers did not find menthol and non-menthol cigarettes to be close substitutes for one another. Non-menthol cigarettes were found to be less of a substitute for menthol cigarettes than vice versa. Young adults and African Americans were less responsive to prices with respect to switching between menthol and non-menthol cigarettes than were older adults and non-African Americans, respectively. CONCLUSIONS: The US Food and Drug Administration (FDA) is grappling with the issue of whether or not to ban menthol cigarettes. The findings from this study suggest that smokers do not find menthol and non-menthol cigarettes to be close substitutes. The strong preference for mentholated cigarettes may serve as a lever to reduce smoking prevalence when combined with increased access to effective cessation treatments.

Differential impact of state tobacco control policies among race and ethnic groups.

AIMS: This paper describes patterns of racial and ethnic cigarette use in the United States and discusses changes in state-level tobacco control policies. Moreover, this paper reviews the existing econometric literature on racial and ethnic smoking and discusses the limitations of that research. Finally, this paper outlines an agenda for future research. METHODS: Patterns of racial and ethnic smoking and changes in state-level tobacco control policies in the United States were obtained from a variety of sources, including surveys and government and private documents and databases. After an extensive literature search was completed, the existing research was scrutinized and recommendations for much-needed future research were put forth. FINDINGS: Despite the fact that certain racial and ethnic minorities bear a disproportionate share of the overall health burden of tobacco, less than a handful of econometric studies have examined the effects of state-level public policies on racial and ethnic smoking. The existing literature finds Hispanics and African Americans to be more responsive to changes in cigarette prices than whites. Only one study examined other state-level tobacco policies. The findings from that study implied that adolescent white male smoking was responsive to changes in smoke-free air laws, while adolescent black smoking was responsive to changes in youth access laws. CONCLUSIONS: While much has been learned from prior econometric studies on racial and ethnic smoking in the United States, the existing literature suffers from numerous limitations that should be addressed in future research. Additional research that focuses on races and ethnicities other than white, black and Hispanic is warranted. Furthermore, future studies should use more recent data, hold sentiment toward tobacco constant and control for a comprehensive set of tobacco policies that take into account not only the presence of the laws, but also the level of restrictiveness of each policy.

Can public policy deter smoking escalation among young adults?

In the wake of significant budget shortfalls, 37 states and the District of Columbia have recently increased cigarette excise taxes to boost revenues. This study examines the impact of increasing the price of cigarettes, which will occur as a consequence of cigarette excise tax increases, and implementing restrictions on smoking in private worksites, restaurants, government worksites, healthcare facilities, and other public places on young adult smoking progression. This paper employs nationally representative longitudinal data on young adults from the Monitoring the Future Surveys matched with information on site-specific prices and smokefree air laws. The estimates clearly indicate that increasing the price of cigarettes would substantially decrease the number of young adults who progress into higher intensities of smoking. In addition, private worksite restrictions and restrictions on smoking in other public places are found to decrease moderate smoking uptake among young adults.

The importance of peer effects, cigarette prices and tobacco control policies for youth smoking behavior.

This paper expands the youth cigarette demand literature by undertaking an examination of the determinants of smoking among high school students incorporating the importance of peer effects and allowing cigarette prices (taxes) and tobacco control policies to have a direct effect and an indirect effect (via the peer effect) on smoking behavior. To control for the potential endogeneity of our school-based peer measure we implement a two-stage generalized least squares estimator for a dichotomous dependent variable and implement a series of diagnostic tests. The key finding is that peer effects play a significant role in youth smoking decisions: moving a high-school student from a school where no children smoke to a school where one quarter of the youths smoke is found to increase the probability that the youth smokes by about 14.5 percentage points. The results suggest that there is a potential for social multiplier effects with respect to any exogenous change in cigarette taxes or tobacco control policies.

The impact of advertising on nicotine replacement therapy demand.

While much is known about the economic determinants of tobacco use, very little is known about the economic determinants of nicotine replacement therapy (NRT) use. This paper is the first econometric study to examine the impact of advertising on NRT demand. Pooled cross-sectional time-series scanner-based data for 50 major metropolitan markets in the USA covering the period between the second quarter of 1996 and the second quarter of 2002 are used in the analysis. Fixed-effects modeling is employed to estimate the NRT demand equation. The estimates indicate that increased advertising of Nicoderm CQ transdermal patches and Nicotrol transdermal patches increases per-capita sales of established Nicoderm CQ and Nicotrol products, respectively. However, increased advertising of Nicorette polacrilex (gum) was found not to significantly increase sales of established Nicorette products. Moreover, decreases in the price of NRT and increases in the price of cigarettes were found to increase per-capita sales of NRT products. Given the documented efficacy of NRT, measures to increase peoples' awareness of NRT products through advertising, measures to decrease the price of NRT, and measures to increase the price of cigarettes would be effective means to increase the use of NRT, likely leading to decreased cigarette smoking and reductions in the future public health burden caused by tobacco use.

State tobacco control spending and youth smoking.

OBJECTIVE: We examined the relationship between state-level tobacco control expenditures and youth smoking prevalence and cigarette consumption. METHODS: We estimated a 2-part model of cigarette demand using data from the 1991 through 2000 nationally representative surveys of 8th-, 10th-, and 12th-grade students as part of the Monitoring the Future project. RESULTS: We found that real per capita expenditures on tobacco control had a negative and significant impact on youth smoking prevalence and on the average number of cigarettes smoked by smokers. CONCLUSIONS: Had states represented by the Monitoring the Future sample and the District of Columbia spent the minimum amount of money recommended by the Centers for Disease Control and Prevention, the prevalence of smoking among youths would have been between 3.3% and 13.5% lower than the rate we observed over this period.

Tobacco control policies and youth smoking: evidence from a new era.

This chapter examines the impact of cigarette prices, taxes, and tobacco control policies on youth and young adult smoking propensity and intensity, in the U.S. during the years 1997-2001, a period characterized by significant changes in cigarette prices and tobacco control policies. Employing a fixed effects technique, we find a strong negative impact of cigarette prices and taxes on youth and young adult smoking prevalence and conditional demand. Moreover, we find purchase, use, and possession laws to be inversely related to youth and young adult smoking prevalence.

Public policy and smoking cessation among young adults in the United States.

In the wake of significant budget shortfalls, numerous states have increased cigarette excise taxes to boost revenues. This study examines whether or not increasing the price of cigarettes, which will occur as a consequence of cigarette excise tax increases, and implementing stronger restrictions on smoking in private worksites and other public places have an impact on smoking cessation decisions of young adults, thereby influencing public health in the United States (US). This paper employs longitudinal data on young adults from the Monitoring the Future Surveys matched with information on site-specific prices and measures of clean indoor air restrictions. A Cox regression is employed to estimate the smoking cessation equations. The estimates clearly indicate that increasing the price of cigarettes increases the number of young adults who quit smoking. The average price elasticity of cessation is 0.35. In addition, stronger restrictions on smoking in private worksites and public places other than restaurants increase the probability of young adult smoking cessation. Given the well-documented benefits of smoking cessation, a significant increase in cigarette excises taxes may be one of the most effective means to reduce premature death and disease in the United States.

The demand for nicotine replacement therapies.

This paper reports on the first econometric study to examine the determinants of nicotine replacement therapy (NRT) demand. Pooled cross-sectional time-series scanner-based data for 50 major metropolitan markets in the United States covering the period between the second quarter 1996 and the third quarter 1999 are used in the analysis. Fixed-effects modeling is employed to assess the impact of NRT prices, cigarette prices, and other determinants on NRT demand. The estimates indicate that decreases in the price of NRT and increases in the price of cigarettes would lead to substantial increases in per-capita sales of NRT products. The average own-price elasticity of demand, which measures the responsiveness of consumer demand for NRT products to changes in the price of NRT, for Nicoderm CQ and Nicorette, is -2.33 and -2.46, respectively. The average cross-price elasticity of demand, which measures the responsiveness of consumer demand for NRT products to changes in the price of cigarettes, for Nicoderm CQ and Nicorette, is 0.772 and 0.764, respectively.