The effects of e-cigarette taxes on e-cigarette prices and tobacco product sales: Evidence from retail panel data

Chad Cotti, Charles Courtemanche, Joanna Catherine Maclean, Erik Nesson, Michael Pesko and Nathan Tefft

Journal of Health Economics, 2022, vol. 86, issue C

Abstract: We estimate the effect of e-cigarette tax rates on e-cigarette prices, e-cigarette sales, and sales of other tobacco products using NielsenIQ Retail Scanner data from 2013 to 2019. We find that 90% of e-cigarette taxes are passed on to consumer retail prices. We then estimate reduced form and instrumental variables regressions to examine the effects of e-cigarette and cigarette taxes and prices on sales. We calculate an e-cigarette own-price elasticity of -2.2 and particularly large elasticity of demand for flavored e-cigarettes. Further, we document a cigarette own-price elasticity of -0.4 and positive cross-price elasticities of demand between e-cigarettes and cigarettes, suggesting economic substitution.

Keywords: Taxation; e-cigarettes; Cigarettes; Pass-through rate; Regulation (search for similar items in EconPapers)
JEL-codes: H2 I1 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:86:y:2022:i:c:s0167629622000911

DOI: 10.1016/j.jhealeco.2022.102676

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