How do US Adults Who Vape Choose Among Different E-Cigarette (EC) Models and Cigarettes in Response to Prices and Taxes

Abstract

States continue to impose E-Cigarette (EC) taxes without clear evidence of the cross-price elasticities between multiple EC types and between ECs and cigarettes. Moreover, existing literature focused on EC sales or prevalence outcomes instead of consumption units of various EC types. We examined how EC and cigarette consumption respond to prices and taxes and estimated own-price and cross-price elasticities for multiple EC types using a nationally representative volumetric choice experiment (VCE) of US adults who vaped ECs in the past 30 days. In the VCE, participants made purchases for monthly consumption in response to changing tax and price levels in 9 choice sets, and 700 people were recruited and answered VCE questions during 2023. Each choice set includes disposables, pod devices, pod refill packs, pod starter kits, tank devices, e-liquids, and cigarettes. Zero-inflated Poisson model was used to estimate price and tax impacts, as well as own- and cross-price elasticities of demand for these products. Increasing taxes and prices (e.g., minimum pricing floor) reduces EC consumption among US adults who vape, and different EC types are economic substitutes. Platform goods (e.g., tank devices and e-liquids, pod devices and refill packs) are economic complements. Increasing EC prices likely does not lead to higher cigarette consumption among the general adult EC-using population. The design of EC taxes by EC models and components may be needed given their complex economic relationships.