Elsevier

Journal of Health Economics

Volume 44, December 2015, Pages 300-308
Journal of Health Economics

How does electronic cigarette access affect adolescent smoking?

https://doi.org/10.1016/j.jhealeco.2015.10.003Get rights and content

Abstract

Understanding electronic cigarettes’ effect on tobacco smoking is a central economic and policy issue. This paper examines the causal impact of e-cigarette access on conventional cigarette use by adolescents. Regression analyses consider how state bans on e-cigarette sales to minors influence smoking rates among 12 to 17 year olds. Such bans yield a statistically significant 0.9 percentage point increase in recent smoking in this age group, relative to states without such bans. Results are robust to multiple specifications as well as several falsification and placebo checks. This effect is both consistent with e-cigarette access reducing smoking among minors, and large: banning electronic cigarette sales to minors counteracts 70 percent of the downward pre-trend in teen cigarette smoking for a given two-year period.

Introduction

Appropriate electronic cigarette regulation has become one of the central debates in public health policy, with particular interest in how this product affects conventional cigarette use (i.e., smoking)1. Since e-cigarettes deliver nicotine, the same addictive substance as cigarettes, but can be less expensive and are thought to be less risky, some claim that they reduce smoking by leading smokers and would-be smokers to substitute away from cigarettes (harm reduction) (e.g., Cahn and Siegel, 2011, Polosa et al., 2013)2. Others maintain that e-cigarettes increase smoking by inducing initiation among users who would not otherwise smoke (gateway effects), reducing stigma around smoking (renormalization), and/or lowering the full costs of addiction (e.g., by facilitating nicotine use where smoking is prohibited) (e.g., Fairchild et al., 2014, Gostin and Glasner, 2014, Time for e-cigarette and regulation, 2013). As teenagers are responsible for the majority of U.S. smoking initiation, such effects may be particularly evident in this age group. Thus, this paper tests for a causal impact of e-cigarette access on adolescent smoking.

Several studies have examined the teen vaping–smoking relationship, yet potential confounders limit causal interpretation. For example, Dutra and Glantz (2014) find that e-cigarette and cigarette use are positively correlated, which some interpret as evidence of gateway effects (e.g., Chen, 2014, Fernandez, 2014). Yet this could be explained by individuals who are more attracted to experimentation ex ante being more likely to try both products, regardless of any causal effect of one product on demand for the other.

Moreover, the vaping–smoking relationship may vary between population groups. For example, e-cigarette use is associated with a greater intention to quit smoking among smokers in high school (Lee et al., 2013, Dutra and Glantz, 2014) but not college (Sutfin et al., 2013). Thus, average population estimates may mask group-specific effects3.

Focusing on minors, this analysis exploits state policy changes to test the causal impact of reduced e-cigarette access on teen smoking rates. Specifically, prior to January 1, 2014, 24 states banned e-cigarette sales to minors. Regressions use state-level data, specifically two-year average smoking rates from the National Survey on Drug Use and Health, to consider the impact of these bans on the recent smoking rate among 12 to 17 year olds, controlling for state and period fixed effects as well as state cigarette taxes, the presence of smoke-free air laws, medical marijuana legalization, a variety of demographic characteristics, and smoking rates among 18 to 25 year olds. Bans on e-cigarette sales to minors yield a statistically significant 0.9 percentage point increase in the recent smoking rate among 12 to 17 year olds, relative to states without such bans. This effect is both consistent with e-cigarettes reducing smoking among minors, and large: on average, state smoking rates for this age group fell 1.3 percentage points per two-year interval from 2002 to 2009, the year before the first bans went into effect. A 0.9 percentage point increase in smoking counters 70 percent of that downward trend for a given two-year period.

As regular smoking first spikes at age 16 (Lillard et al., 2013), these findings suggest that banning e-cigarette sales to those under age 16 may be preferable to an under-18 ban, in terms of the effect on teen smoking4. This policy implication does not account for the bans’ affect on e-cigarette use per se and associated costs, as state-level data on e-cigarette use are not available for the period of analysis.

This paper offers several contributions to the e-cigarette literature. First, the empirical findings provide the first causal evidence that e-cigarette access reduces teen smoking. In existing research, which tends to identify participation in one behavior directly off of engagement in the other, unobserved factors shaping both smoking and e-cigarette use have hampered causal inference. This paper sidesteps that problem by identifying changes in smoking and e-cigarette use off of exogenous changes in state policy. Results are robust to multiple specifications as well as falsification and placebo tests. Furthermore, the increase in teen smoking in response to such bans is likely unexpected: e-cigarette policy debates to date have not discussed such consequences.

The paper proceeds as follows: Section 2 presents a conceptual framework for the relationship between e-cigarette and cigarette use, while Section 3 tests how state bans on e-cigarette sales to minors impact smoking among 12 to 17 year olds. Section 4 discusses the empirical findings and concludes.

Section snippets

Conceptual framework

Let consumers choose consumption of cigarettes (C), e-cigarettes (E), and a composite good (X) to maximize the following:Wt=UXt,Et,Ct;St+sδsμt+sEt+s1,Ct+s1,μt+s1UXt+s,Et+s,Ct+s

This utility function applies the economic definition of addiction – a greater addictive stock of nicotine (St) raises one's current period marginal utility for nicotine consumption (2Ut/∂St∂Nt > 0) – but, because it focuses on youths, assumes that consumers do not anticipate the impact of current consumption of

State bans on electronic cigarette sales to minors

Electronic cigarettes entered the U.S. market in 2007, the same year that Ruyan, the Chinese company that invented e-cigarettes, received an international patent. Though the Food and Drug Administration (FDA) banned e-cigarette imports in 2008, a legal case challenging this ban dragged from the spring of 2009 into December of 2010 (Riker et al., 2012). Absent clear FDA regulation, and with a variety of marketing tactics available to e-cigarettes that had been restricted for cigarettes, states

Conclusion

Across the board, this paper's analyses find that reducing e-cigarette access increases smoking among 12 to 17 year olds. The effect is large: over the 8 years preceding the first bans on e-cigarette sales to minors, states recent smoking rates for this age group fell an average of 1.3 percentage points every two years. The estimated 0.9 percentage point rise in smoking due to bans on e-cigarette sales to minors counters 70 percent of this downward trend for a given two-year period, in states

Acknowledgements

I am grateful to David Cutler, Richard Frank, Claudia Goldin, Frank Sloan, Jody Sindelar, Martin Anderson, Sebastian Bauhoff, Shivaani Prakash, Mark Schlesinger, and Sam Richardson for helpful comments and discussion, and to the Radcliffe Institute for Advanced Study, for fellowship funding that helped support this research.

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