The impact of JUUL market entry on cigarette sales: evidence from a major chain retailer in Canada.

ABSTRACT

BACKGROUND: Electronic nicotine delivery systems (ENDS), such as the JUUL system, are nicotine products for adults who currently smoke cigarettes but are looking for an alternative to combustible cigarettes. Sales of ENDS products were legislatively acknowledged and authorized federally in Canada with the Royal Assent of the Tobacco and Vaping Products Act in 2018. METHODS: With the unique dataset from a major chain retailer in Canada, we evaluated the impacts of JUUL market entry on cigarette sales across Canada from January 2017 to August 2019 using two-way fixed effects panel regression models by leveraging on the entry time variation at the city level. We conducted various robustness checks and a permutation test to validate our results. RESULTS: Our estimates suggested that JUUL market entry was, on average, significantly correlated with a 1.65% per-month decrease in cigarette sales during the initial months, and with a potentially larger impact on urban areas. Our results were robust across various specifications and tests. These findings implied that JUUL and combustible cigarettes act as economic substitutes during the study time period in Canada. CONCLUSIONS: These results suggested that local availability of ENDS products, such as JUUL, has the potential to reduce local cigarette consumption.