Just What the Doctor Ordered? The Benefits and Costs of E-Cigarette Regulation in Australia

Donald Kenkel, Alan Mathios, Grace N. Phillips, Revathy Suryanarayana, Hua Wang and Sen Zeng

No 32654, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Australia had adopted a novel approach to e-cigarette policy by requiring a physician’s prescription to lawfully obtain nicotine e-cigarettes. We conducted an online discrete choice experiment to gauge how adult Australian smokers made hypothetical choices between cigarettes, prescription e-cigarettes, non-prescription e-cigarettes, and quitting. We estimate a mixed logit model, which allows us to predict the market shares under different policy scenarios. The mixed logit model also provides estimates of consumer willingness to pay for the benefits from the prescription status of e-cigarettes and the costs of illegal e-cigarette markets. We estimate that the average utility loss from an illegal retail market is worth AU$7.90 per pack-equivalent. We use the corresponding estimates of the compensating variations in income to conduct cost-benefit analyses of possible reforms to Australian e-cigarette regulation. In aggregate, we estimate that the benefits of allowing but not requiring prescriptions of e-cigarettes are AU$1.8 billion per year. Our paper provides a novel contribution to research on e-cigarette regulation and provides a case-study for the policy implementation in Australia. Our paper is also part of our research agenda to explore and develop methods to conduct policy analysis and cost-benefit analysis of regulatory policies that might create illegal markets.

JEL-codes: I12 I18 (search for similar items in EconPapers)
Date: 2024-07
New Economics Papers: this item is included in nep-hea and nep-reg
Note: EH
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w32654.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:32654

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32654
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().