Taxation Policy Linked to High Rates of E-Cigarette Usage: Study

Dec.07.2022
Taxation Policy Linked to High Rates of E-Cigarette Usage: Study
A new study suggests that tobacco taxation may be linked to higher rates of e-cigarette use among young people.

A new study by the University of Queensland in Australia has reached the conclusion that while most young people who try e-cigarettes do not become addicted, the taxation method of tobacco products may be linked to higher rates of e-cigarette use.


A new study analyzed data from nearly 152,000 adolescents in 47 countries who participated in the World Health Organization's tobacco survey between 2015 and 2018.


Dr. Gary Chan, lead researcher at the National Youth Drug Use Research Center at the University of Queensland, stated that the university's research found that the use of electronic cigarettes is often lower in low- and middle-income countries.


The study also examined the correlation between the number of adolescents using e-cigarettes and World Health Organization's tobacco policies, such as monitoring, smoke-free policies, cessation programs, tobacco warning labels, advertising bans, and taxes. It was found that there is indeed a connection between these factors.


According to Dr. Gary Chan, "We have found that higher tobacco taxes are correlated with increased usage of e-cigarettes among young people. This suggests that in countries with higher tobacco taxes, young people may be turning to e-cigarettes as a substitute for traditional cigarettes.


Meanwhile, a study published in the Journal of Risk and Uncertainty in 2021 examined the impact of traditional cigarette and e-cigarette taxation on adult tobacco consumption rates. The study found that increasing the tax rate on e-cigarette products was directly proportional to smoking rates.


Electronic cigarettes and traditional cigarettes are economical substitutes, and a study titled "The impact of tax rates on adult tobacco product use of traditional and electronic cigarettes" analyzed the effects of taxation on these products as well as their usage among American adults. Researchers examined data from the Behavioral Risk Factor Surveillance System and the National Health Interview Survey (NHIS) from 2011-2018.


A research team has found that increasing the tax on traditional cigarettes reduces adult smoking and increases the use of electronic cigarettes. Similarly, higher taxes on electronic cigarettes increase the use of traditional cigarettes and decrease the use of electronic cigarettes.


The cross-tax effect means that these products are economic substitutes. Our findings indicate that a proposed national e-cigarette tax of $1.65 per milliliter of e-liquid would increase the daily proportion of adult smokers by about one percentage point, equivalent to adding 2.5 million adult smokers per day compared to the counterfactual scenario without the tax.


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