Ball State study says higher cigarette taxes lead to less e-cigarette purchases

<p>New Ball State study shows increasing cigarette taxes lead to a decrease in e-cigarette purchases. The study found that a $1 increase in cigarette excise tax reduces the probability that a household purchases e-cigarette products by about 22 percent. <strong>Eric Pritchett, DN</strong></p>

New Ball State study shows increasing cigarette taxes lead to a decrease in e-cigarette purchases. The study found that a $1 increase in cigarette excise tax reduces the probability that a household purchases e-cigarette products by about 22 percent. Eric Pritchett, DN

The Indiana State Department of Health recommends calling Indiana Tobacco Quitline, a free phone-based counseling service that helps smokers quit, at 1-800-QUIT-NOW or (800) 784-8669. 

As politicians, community leaders and public health professionals try finding ways of cutting tobacco use among the 38 million American smokers, a new study suggests raising taxes as a possible solution to the problem.

A recent study by a Ball State professor concluded that increasing taxes on cigarettes not only reduces cigarette but e-cigarette purchases as well.

Erik Nesson, associate professor of economics, found that a $1 increase in cigarette excise tax reduces the probability that a household purchases e-cigarette products by about 22 percent and reduces the number of e-cigarette product purchases by about 42 percent.

“That surprised us a little bit,” Nesson said. “But if you think about it more, it makes sense.”

Nesson said that adults who are heavy users of cigarettes supplement their cigarette consumption with e-cigarettes. 

“It makes more sense that there’d be a complementary relationship,” Nesson said.

Among adolescents however, there’s no clear consensus about there being a similar effect, since prior studies do not adequately account for nicotine’s habit-forming potential.

“Adolescents are not addicted to nicotine yet,” Nesson said. “It’s more likely that they use cigarettes and e-cigarettes as substitutes.” 

Along with a decrease in cigarette purchases, the study also found that taxes and smoke-free air laws increase purchases of smoking cessation products like nicotine patches and nicotine gums. A $1.00 increase in cigarette excise taxes leads to an 18 percent increase in the probability that a household purchases smoking cessation products.

However, there was no statistically significant evidence for smoke-free air laws affecting e-cigarette purchases.

“It has something to say about what public policy should be in addressing tobacco use,” Nesson said. “It kind of adds to the view among most health economists that the most effective tobacco control policy is raising the price of cigarettes through increasing taxes.”

Indiana currently imposes a 99.5 cents excise tax on all cigarette packs. According to Centers for Disease Control, this ranks Indiana 36th in the country for the highest cigarette taxes and below the national average of $1.70. 

Tobacco Free Indiana, a coalition of organizations committed to reducing the harmful effects of tobacco, is currently pushing for raising this by $1.50 per pack.

“It helps people to stop smoking because the price just becomes too high,” said Jordan Moss, the program coordinator for the Tobacco Free Coalition of Delaware County. “One of the other benefits of that is you don’t get started.”

In 2016, CDC estimated that 21.1 percent of Hoosier adults were cigarette smokers, higher than the national rate of 15.5 percent. It also estimated that in Indiana, 16.9 percent of adults between the ages of 18 and 24 were cigarette smokers.

A bill that proposes increasing Indiana state cigarette tax by $2 and also increasing the minimum age requirements from 18 to 21 for the sale and purchase of all tobacco products was unanimously approved by the House Committee on Public Health in January . It has currently been referred to the House Ways and Means Committee and hasn’t been put up for a vote yet in the General Assembly.

“One of the next things we want to do is try and estimate how strongly e-cigarette purchases have been affected by those first few taxes on e-cigarettes,” Nesson said. He also said that they want to do more studies on the relationship between cigarettes and e-cigarettes.

In 2015, CDC reported that nearly 7 in 10 adult cigarette smokers wanted to quit smoking. Given the study’s findings, raising cigarette taxes might be an incentive for those who wish to quit smoking.  

Contact Rohith Rao with comments at rprao@bsu.edu or on Twitter @RaoReports. 

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