The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data / Chad D. Cotti, Charles J. Courtemanche, Johanna Catherine Maclean, Erik T. Nesson, Michael F. Pesko, Nathan Tefft.

Format:

Book

Author/Creator:

Cotti, Chad D.

Contributor:

Courtemanche, Charles J.

Maclean, Johanna Catherine.

Nesson, Erik T.

Pesko, Michael F.

Tefft, Nathan.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26724.

NBER working paper series no. w26724

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We estimate the effect of e-cigarette tax rates on e-cigarette prices, e-cigarette sales, and sales of other tobacco products using NielsenIQ Retail Scanner data from 2013 to 2019. We find that 90% of e-cigarette taxes are passed on to consumer retail prices. We then estimate reduced form and instrumental variables regressions to examine the effects of e-cigarette and cigarette taxes and prices on sales. We calculate an e-cigarette own-price elasticity of -2.2 and particularly large elasticity of demand for flavored e-cigarettes. Further, we document a cigarette own-price elasticity of -0.4 and positive cross-price elasticities of demand between e-cigarettes and cigarettes, suggesting economic substitution.

Notes:

January 2020.

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