Misinformation, consumer risk perceptions, and markets: The impact of an information shock on vaping and smoking cessation

Abstract

We study the impact of an information shock created by an outbreak of lung injuries apparently related to e-cigarettes. We use data from multiple sources: surveys of risk perceptions conducted before, during, and after the outbreak; an in-depth survey on risk perceptions and vaping and smoking behavior; and national aggregate time-series sales data. We find that after the outbreak, consumer perceptions of the riskiness of e-cigarettes sharply increased. From our estimated e-cigarette demand models, we conclude that the information shock reduced e-cigarette demand and the use of e-cigarettes for smoking cessation by about 30 percent.