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Intended and Unintended Effects of E-cigarette Taxes on Youth Tobacco Use

Rahi Abouk (), Charles Courtemanche (), Dhaval Dave (), Bo Feng, Abigail S. Friedman, Johanna Maclean, Michael Pesko (), Joseph J. Sabia and Samuel Safford

No 29216, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Over the past decade, rising youth use of e-cigarettes and other electronic nicotine delivery systems (ENDS) has prompted aggressive regulation by state and local governments. Between 2010 and 2019, ten states and two large counties adopted ENDS taxes. Applying a continuous treatment difference-in-differences approach to data from two large national datasets (Monitoring the Future and the Youth Risk Behavior Surveillance System), this study explores the impact of ENDS taxes on youth tobacco use. We find that ENDS taxes reduce youth e-cigarette consumption, with estimated e-cigarette tax elasticities of -0.06 to -0.21. However, we estimate sizable positive cigarette cross-tax elasticities, suggesting economic substitution between cigarettes and e-cigarettes for youth. These substitution effects are particularly large for frequent cigarette smoking. We conclude that the unintended effects of ENDS taxation may more than fully offset any public health gains.

JEL-codes: H2 I1 I18 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-hea, nep-isf, nep-law and nep-pub
Note: CH HC HE LE PE
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