Electronic or e-cigarettes are very popular in Rochester and new stores are opening in many parts of the city. In fact, in our city and more generally in the United States, e-cigarettes appear to have captured the imagination of a growing number of teens and hence e-cigarettes are also a key concern for local school administrators.
Despite the fact that e-cigarettes have now been around for several years, there continues to be a great deal of uncertainty about them. From the standpoint of public policy, three questions loom large. First, are e-cigarettes less or more harmful than conventional cigarettes? Second, should we continue to regulate their use and, in this regard, might it ever make sense to ban them? Finally, are e-cigarettes complements to or substitutes for conventional cigarettes? If they are substitutes, then like Coke and Pepsi, e-cigarettes are consumed in lieu of cigarettes and vice versa. If, on the other hand, they are complements then, like milk and cookies, they are consumed together.
Interesting new research by the economists Hunt Alcott of Microsoft Research and Charlie Rafkin of the Massachusetts Institute of Technology sheds valuable light these three questions by reducing some of the existing uncertainty about the use of e-cigarettes. These researchers surveyed 137 public health experts and the results of this survey make for sobering reading.
First, the surveyed experts believe that some prominent prior assessments which noted that vaping—which simulates smoking—is at least 95 percent safer than smoking are probably excessively optimistic about the “positive” aspects of vaping. Why? The experts say this is because we now have access to new information and because e-cigarette products themselves have changed over time. On average, the public health experts who responded to the Alcott-Rafkin survey believe that “vaping is 37 percent as harmful as smoking cigarettes, where harms are measured as effects on quality-adjusted life expectancy.”
Given that e-cigarettes are harmful, the case for regulating their use is clear. That said, because so many students in Monroe County now vape, suspending all of them is not practical. A 2019 WXXI story reported that an annual survey of public high school students found that if Monroe County school districts were to suspend all “vapers,” 45 percent of seniors would be out of class at some point.
A more reasonable approach is to tax the consumption of e-cigarettes. The empirical model analyzed by Alcott and Rafkin shows that because policy makers are typically operating in an environment of uncertainty and because of existing distortions in the real world, it is not obvious how large the optimal tax on e-cigarette consumption should be or whether this tax should always be positive. Subject to this caveat, we learn that the optimal tax is generally positive, meaning that the consumption of e-cigarettes ought to be discouraged, and it is larger in magnitude than the tax actually applied in a number of U.S. jurisdictions in 2018.
San Francisco has banned the sale of e-cigarettes while keeping cigarettes legal. The research shows that extreme steps like a ban make sense only when it is not possible to levy optimal taxes, possibly because of political constraints, or when there is widespread tax evasion.
Does it ever make sense to subsidize or encourage the consumption of e-cigarettes? It does, in two unusual circumstances. First, if vaping is only 5 percent (and not 37 percent) as harmful as smoking and it is a stronger substitute for cigarette smoking than what the research finds, then it makes sense to subsidize vaping. Second, if Rochesterians and Americans in general greatly overestimate the damaging impacts of vaping and the provision of information cannot correct this overestimation, then, once again, a subsidy for vaping can be justified.
Finally and somewhat puzzlingly, the research demonstrates that “vaping is not a significant complement or substitute for smoking.” This leaves us with two unsettling conclusions. First, it is quite possible that teens who vape are more likely to smoke as adults. Second, it is also possible that vaping and smoking are substitutes for adults but complements for youth. Clearly, the optimal regulation of e-cigarettes is a complicated topic with many moving parts!
Amitrajeet A. Batabyal is the Arthur J. Gosnell professor of Economics and the Interim Head of the Sustainability Department, both at the Rochester Institute of Technology, but these views are his own. The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. Submissions to the Letters page should be sent to [email protected].