The impact of vaping and regulatory environment on cigarette demand: behavioral economic perspective across four countries

Future nicotine use preferences of current cigarette smokers: Findings from the 2020 International Tobacco Control Four Country Smoking and Vaping Survey

INTRODUCTION

Consumer preferences should be important factors that are considered when developing health policies and interventions. This paper examines the prevalence of, and factors associated with, consumer preferences regarding smoking behaviour 1 to 2 years in the future.

METHODS

At least weekly cigarette smokers in the 2020 wave of the International Tobacco Control Four Country Smoking and Vaping Survey (USA, Canada, England and Australia) (N = 8642) were asked if they preferred to continue to smoke or to quit with or without an alternative nicotine product (ANP) over the next 1-2 years.

RESULTS

Country-specific weighted data showed 21.5% preferred to continue smoking and 8.0% were uncertain, leaving 70.6% preferring to quit: 13.7% using an ANP and 56.9% completely quitting nicotine. Apart from interest in quitting, the main predictors of preferring to quit were history of vaping, being aged 55 and over, smoking weekly, worrying about smoking harms, regretting starting and believing vaping is less harmful relative to smoking. Among those preferring to quit, preferring to use ANPs in future was very strongly associated with current vaping (especially daily), being younger, living in England, reporting strong urges to smoke, believing vaping is much less harmful than smoking, and not strongly regretting starting to smoke, and not wanting to quit.

DISCUSSION AND CONCLUSIONS

A significant minority of smokers preferred not to quit, at least in the next year or two. Both interest in quitting and preference for ANPs over complete cessation were associated with similar covariates, including interest in vaping.

How cigarette excise tax pass-through to prices responds to the uptake and evolution of e-cigarettes (ECs)

BACKGROUND

How excise taxes are passed through to prices determines whether tax policies will be effective in changing smoking behaviours. Though previous literature has documented that cigarette taxes are overly shifted to prices, there is limited evidence on how cigarette tax pass-through to prices is affected by the uptake and evolution of e-cigarettes (ECs) in the US market.

OBJECTIVE

This study investigates how cigarette excise tax pass-through rate varied by price levels (the 25th, 50th, and 75th percentile prices) and the uptake and evolution of ECs.

METHODS

Tax pass-through rates were assessed using ordinary least squares regressions while controlling for state, year and month fixed effects. Different trends were then tested for the pre-EC uptake era (2006-2011), EC uptake era (2012-2016) and the evolution of nicotine salt-based ECs era (2017 and later).

FINDINGS

Cigarette excise taxes were fully shifted to the 25th and 50th percentile prices and overly shifted to the 75th percentile prices at a 1:1.1 rate. While cigarette excise taxes had a continuous impact on raising prices, the tax pass-through rates were lower for lower priced cigarettes, and states imposed lower taxes.

CONCLUSIONS

Continuing to raise cigarette taxes may be needed to create financial incentives to encourage people who smoke to switch to ECs. In addition, continuing to raise cigarette taxes and additional pricing policies such as price promotion restrictions are needed to increase retail prices and reduce price minimisation opportunities.

Impact of vaping introduction on cigarette smoking in six jurisdictions with varied regulatory approaches to vaping: an interrupted time series analysis

OBJECTIVE

We sought to quantify the impact of vaping introduction on cigarette smoking across settings with varied regulatory approaches to vaping.

DESIGN

Interrupted time series analysis, adjusted for cigarette tax levels.

SETTING

Four Canadian provinces, UK and Australia.

PARTICIPANTS

Entire population of smokers in each country.

INTERVENTIONS

The year that vaping was widely introduced in each country.

PRIMARY AND SECONDARY OUTCOME MEASURES

The primary outcome is cigarette consumption per adult, and the secondary outcome is smoking prevalence among young adults.

RESULTS

Based on allowable nicotine levels, restrictions on e-cigarette advertising, sales and access, and taxation, the least to most restrictive jurisdictions were, in order, Alberta, Ontario, Quebec and British Columbia (all in Canada), UK and Australia. In most, but not all, settings where higher nicotine content was permitted in vaping products (66 mg/mL), vaping introduction led to a reduction in cigarette consumption per capita (Ontario: p=0.037, Quebec: p=0.007) or in smoking prevalence among young adults (Alberta men, p=0.027; Quebec men, p=0.008; Quebec women, p=0.008). In the UK, where the maximum permitted nicotine content in vaping products was 20 mg/mL, vaping introduction slowed the declining trend in cigarette smoking among men aged 16-24 years (p=0.031) and 25-34 years (p=0.002) but not in cigarette consumption per adult. In Australia, where nicotine was not permitted in e-cigarettes, e-cigarette introduction slowed the declining trend in cigarette consumption per capita and in smoking prevalence among men aged 18-24 years (cigarette consumption: p=0.015, prevalence: p=0.044).

CONCLUSION

In environments that enable substitution of cigarettes with e-cigarettes, e-cigarette introduction reduces overall cigarette consumption. Thus, to reduce cigarette smoking, policies that encourage adults to substitute cigarette smoking with vaping should be considered.

Demand for Factory-Made Cigarettes and Roll-Your-Own Tobacco and Differences Between Age and Socioeconomic Groups: Findings From the International Tobacco Control Netherlands Survey

INTRODUCTION

Macroeconomic studies have shown that young individuals who smoke, and have a low socioeconomic status respond more strongly to price increases. Most of this evidence stems from research on factory-made (FM) cigarettes. With the rising popularity of roll-your-own (RYO) tobacco, there is a need for studies on cigarette demand that distinguish between both.

AIMS AND METHODS

This study examined whether individual demand differed for FM and RYO tobacco, and across age, and socioeconomic (income and education) groups. Purchase tasks for FM and RYO cigarettes were included in the 2020 International Tobacco Control (ITC) Netherlands Survey. Adults who smoke daily (n = 1620) stated how many cigarettes they would smoke in 24 hours across eight prices. Four demand indices were derived: intensity (consumption at zero costs), alpha (rate of change in elasticity), Pmax (turning point elasticity), and breakpoint (lowest price where consumption equals zero). The indices were tested for subgroup differences.

RESULTS

Individuals who smoke RYO tobacco indicated higher intensity, and greater alpha than individuals who smoke FM cigarettes. Participants aged 25-39 had lower Pmax, and 18-24 year olds displayed higher breakpoints. Participants with low income displayed higher intensity, and lower Pmax than other income groups. No associations were found with education.

CONCLUSIONS

Individuals who smoke RYO tobacco indicated higher price sensitivity than those smoking FM cigarettes, supporting the need to harmonize tobacco taxation. Taxation may be especially beneficial to reducing consumption among individuals with a low income or smoke RYO tobacco. Substantially higher prices are needed in the Netherlands to achieve the desired results.

IMPLICATIONS

Individuals who smoke daily were willing to pay substantially higher prices than the current market prices, indicating the room and need for much higher taxation levels. Demand for RYO tobacco was more sensitive to price changes than demand for FM cigarettes. Taxation should be raised at equivalent rates for FM and RYO cigarettes. Taxation appears to be especially effective in reducing consumption among people who smoke RYO tobacco and low-income individuals. It remains important to combine increased taxation with other tobacco control measures.

Behavioral economic measurement of cigarette demand: A descriptive review of published approaches to the cigarette purchase task

The cigarette purchase task (CPT) is a behavioral economic method for assessing demand for cigarettes. Growing interest in behavioral correlates of tobacco use in clinical and general populations as well as empirical efforts to inform policy has seen an increase in published articles employing the CPT. Accordingly, an examination of the published methods and procedures for obtaining these behavioral economic metrics is timely. The purpose of this investigation was to provide a review of published approaches to using the CPT. We searched specific Boolean operators (["behavioral economic" AND "purchase task"] OR ["demand" AND "cigarette"]) and identified 49 empirical articles published through the year 2018 that reported administering a CPT. Articles were coded for participant characteristics (e.g., sample size, population type, age), CPT task structure (e.g., price framing, number and sequence of prices; vignettes, contextual factors), and data analytic approach (e.g., method of generating indices of cigarette demand). Results of this review indicate no standard approach to administering the CPT and underscore the need for replicability of these behavioral economic measures for the purpose of guiding clinical and policy decisions. (PsycInfo Database Record (c) 2020 APA, all rights reserved).

An Analysis of the FTC's Attempt to Stop the Altria-Juul Labs Deal

On 20 December 2018, Altria, the largest US cigarette company, announced an offer for a 35% share of the large and rapidly growing vaping product company, Juul Labs. On 2 April, 2020, the Federal Trade Commission issued a complaint that the deal was anticompetitive and should be voided. This paper analyzes the deal. We find that the deal gives Altria market power in the e-cigarette market through its support of Juul in retail stores and through the agreement not to otherwise compete in the e-cigarette market. The deal also has implications for its marketing of heated tobacco product IQOS and generally may provide Altria greater control of the broader nicotine delivery product market.

Which smokers adopt e-cigarettes and at what price? An experimental estimation of price elasticity of demand and factors correlated with e-cigarette adoption

E-cigarette use has surged in recent years. Many of these new users are cigarette smokers. It is unclear whether e-cigarette adoption by smokers will lead to improved public health due to uncertainty about whether e-cigarettes help smokers quit using cigarettes and about whether ongoing dual use reduces exposure to toxins. A third source of uncertainty is whether providing cigarette smokers with sample e-cigarettes increases e-cigarette adoption. To provide insight into this final issue, we follow up with cigarette smokers who left an experimental auction with an e-cigarette, contacting them after two weeks, six weeks, and six months to determine which demographic and smoking-related characteristics predict continued e-cigarette use. We find that smokers who have made a serious quit attempt, have been advised to quit smoking, or have previously tried e-cigarettes are significantly more likely to report continued e-cigarette use. Women and smokers from racial and ethnic minority groups are significantly less likely to use e-cigarettes at follow up, as are those who said they would rather quit than switch to e-cigarettes. We also use experimental auction bids to estimate the price elasticity of demand for e-cigarettes, finding that a 10% increase in price results in a 5.6% reduction in quantity demanded. This suggests e-cigarette demand is less price sensitive than some earlier studies have found. While a tax on e-cigarettes can still be an effective tool for reducing e-cigarette demand, the reduction in demand may be smaller than some earlier studies would suggest.

Costs of vaping: evidence from ITC Four Country Smoking and Vaping Survey

Study objectives

To compare the prices paid for nicotine vaping products (NVPs) and supplies among current NVP users to prices paid for cigarettes among current smokers.

Data

The 2016 International Tobacco Control Four Country Vaping and Smoking Survey (4CV1). Key measures included: (1) self-reported prices paid for reusable NVPs (eg, rechargeable devices with cartridges and tank system devices with e-liquids) in the 3-month period prior to the survey among current NVP users, (2) prices paid for disposable NVPs, cartridges and e-liquids purchased in the last 30 days among current NVP users and (3) self-reported prices paid for cigarettes among current smokers.

Results

Disposable NVP price was higher than the price of a comparable unit for combustible cigarettes in England (EN), USA and Canada (CA). Prefilled cartridge price was higher than the price of a comparable unit of cigarettes in USA and CA, but lower in EN and Australia. E-liquid price was consistently lower than the price of a comparable unit of cigarettes across four countries. For start-up costs, price of a rechargeable device is approximately 3–5 times higher than a pack of cigarettes in four countries.

Conclusion

NVP prices were generally higher than prices of combustible cigarettes, especially the high upfront NVP devices. The high upfront costs of purchasing a reusable NVP may discourage some smokers from switching to vaping. However, the average lower costs of cartridges and e-liquids relative to a package of cigarettes make switching to a NVP an attractive alternative to smoking in the long term so long as smokers switch completely to vaping.