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Effect of e-cigarette taxes on e-cigarette and cigarette retail prices and sales, USA, 2014–2019
  1. Megan C Diaz1,
  2. Emily Donovan1,
  3. John Tauras2,3,
  4. Daniel Stephens1,
  5. Barbara Schillo1,
  6. Serena Phillips4,
  7. Frank J Chaloupka5,
  8. Michael Pesko4
  1. 1Schroeder Institute, Truth Initiative, Washington, DC, USA
  2. 2Department of Economics, University of Illinois Chicago, Chicago, Illinois, USA
  3. 3Health Economics Program, National Bureau of Economic Research, Cambridge, Massachusetts, USA
  4. 4Department of Economics, Georgia State University, Atlanta, Georgia, USA
  5. 5Institute for Health Research and Policy, University of Illinois, Chicago, Illinois, USA
  1. Correspondence to Dr Megan C Diaz, Truth Initiative Schroeder Institute, Washington, DC 20001, USA; mdiaz{at}


Objective To use a standardised e-cigarette tax measure to examine the impact of e-cigarette taxes on the price and sales of e-cigarettes and cigarettes in the USA.

Design We used State Line versions of NielsenIQ Retail Scanner data from quarter 4 of 2014 through quarter 4 of 2019 to calculate e-cigarette and cigarette prices and sales in 23 US states. We then estimated how these outcomes are associated with standardised state-level e-cigarette taxes, controlling for state fixed effects, quarter-by-year fixed effects, cigarette taxes, other tobacco control policies and other state-level time-varying characteristics.

Results A real $1 increase in the e-cigarette standardised tax increases the price of 1 mL of e-liquid between $0.43 and $0.59 depending on specification. Controlling for fixed effects and cigarette taxes, a 10% increase in e-cigarette taxes is estimated to reduce e-cigarette sales by 0.5% and increase cigarette sales by 0.1%, though both results are attenuated and statistically insignificant in a model with full controls.

Conclusions Our study finds that e-cigarette taxes increase e-cigarette retail prices by approximately half of the tax. Further, e-cigarette taxes are associated with reduced sales of e-cigarettes and increased sales of cigarettes in some specifications. Our estimates are sizably lower than from other studies using sales and survey data.

  • Taxation
  • Economics
  • Electronic nicotine delivery devices

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  • Twitter @MeganCDiaz, @mikepesko

  • Contributors MCD: conceptualisation, methodology, formal analysis, writing—original draft preparation, writing—reviewing and editing. ED: project administration, writing—original draft, writing—reviewing and editing. JT, MP: conceptualisation, methodology, writing—original draft, reviewing and editing. DS: data collection and analysis, writing—reviewing and editing. BS, FJC: writing—reviewing and editing. SP: data collection, writing—reviewing and editing. MCD is the guarantor.

  • Funding This study was funded by Truth Initiative. Truth Initiative was involved in all aspects of the study design. Research reported in this publication was supported by the National Institute on Drug Abuse of the National Institutes of Health (Award No R01DA045016).

  • Disclaimer The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.

    The conclusions drawn from the NielsenIQ data are those of the researcher(s) and do not reflect the views of NielsenIQ. NielsenIQ is not responsible for, had no role in, and was not involved in analyzing and preparing the results reported.

  • Competing interests None declared.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Supplemental material This content has been supplied by the author(s). It has not been vetted by BMJ Publishing Group Limited (BMJ) and may not have been peer-reviewed. Any opinions or recommendations discussed are solely those of the author(s) and are not endorsed by BMJ. BMJ disclaims all liability and responsibility arising from any reliance placed on the content. Where the content includes any translated material, BMJ does not warrant the accuracy and reliability of the translations (including but not limited to local regulations, clinical guidelines, terminology, drug names and drug dosages), and is not responsible for any error and/or omissions arising from translation and adaptation or otherwise.