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New research confirms that (as common sense suggests) reducing the appealing aspects of e-cigarettes devalues them to both smokers and vapers

10, Nov, 2015

by Tom Pruen

In bit of a back to front blog, I’ll start with the conclusion from the abstract:

To those who use e-cigarettes (and economists of any stripe), this will seem like such a completely self-evident fact that it raises the question of why it was even studied. It does, however, provide some information on a question that has been asked recently in Wales (although it was funded by the Florida Department of Health, and conducted in Florida, so the populations will be a bit different. Given the Welsh Health Ministers apparent preference for US data over Welsh, or even UK data, this would not seem problematic however).

The question is:

How much will a ban on the use of e-cigs in public places reduce their appeal to smokers and existing e-cig users?

The short answer is by about 20%.

The long answer is a bit more complicated, as is always the case, so I’ll run through the research in a bit more detail.

What is the research?

It is a report on part of a cross-sectional survey conducted annually in Florida. In large part (by my evaluation) to simplify study design, respondents were asked to place a dollar value on a disposable e-cigarette, having the following features:

They were then asked to revalue the product if features were removed. The order of the removal was always the same, starting at the top of the feature list, and working down. This may have influenced the results (although it is not apparent what the effect would be).

Results and conclusions

Each feature removal (not surprisingly) resulted in a negative change in the price people were willing to pay for the product.

 

Particularly notable are:

  • the importance of flavours to vapers, with an 18% reduction, but not dual users or smokers (-1.0 and -8.2%, respectively), highlighting the importance of this aspect.
  • the ≈20% reduction in value to both smokers and vapers of an indoor ban (although not for dual users).
  • The low reduction for help with quitting in vapers (who, of course, are no longer smoking, so in many ways it is amazing there is any effect at all) compared with smokers.

 

Also notable from elsewhere in the data is that 73.9% of dual users had made a quit attempt within the last year, compared with only 36.5% of smokers – suggesting that dual use is a path to complete substitution for many.

The extent to which the restriction in use devalues the products to current users and smokers highlights the potential risks associated with public place bans – such as that proposed by the Welsh Government. Indeed, we calculated this risk - in economic terms - in our report Banning E-Cigarettes in Public Places: The Unintended Harm to Smokers and to Non-Smokers:

A worst case scenario based on conservative estimates of the numbers of people who will return to cigarettes, and the numbers who will continue smoking rather than begin 'vaping', implies:

  • Welsh citizens as a whole losing almost 84,000 (quality adjusted) years of life, and;
  • the loss of the equivalent of over £5 billion.

 

A regulatory approach which damages the value proposition of e-cigarettes to both vapers and smoker is not precautionary, instead being an action likely to cause harm. Not taking such an action would be precautionary.

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