Late last year I pointed out that the so-called gateway from vaping to combustible cigarettes was based on dodgy statistics. Nonetheless the Australian government remains committed to vaping being outlawed – or only available under prescription.
In the meantime the war on combustible cigarettes has become bogged down.
The anti-vaping attitude of the Australian government is leading to adverse health outcomes and probably costing lives too.
- E-cigarettes and adult smoking: Evidence from Minnesota (Saffer et.al 2020)
- The effects of traditional cigarette and e-cigarette tax rates on adult tobacco product use (Pesko et.al 2020)
These two papers examine the impact of tobacco tax increases on the consumption of combustible cigarettes and also on the consumption of e-cigarettes (vaping). They also look at the effect of introducing (or increasing) taxes on vaping fluid.
Both papers report an interesting and important result:
Estimates suggest that the e-cigarette tax increased adult smoking and reduced smoking cessation in Minnesota, … (Saffer et.al 2020)
… we find evidence that higher traditional cigarette tax rates reduce adult traditional cigarette use and increase adult e-cigarette use. Similarly, we find that higher e-cigarette tax rates increase traditional cigarette use and reduce e-cigarette use. Cross-tax effects imply that the products are economic substitutes. (Pesko et.al 2020)
Consumers who are dissuaded from using vapes end up smoking combustible cigarettes. Now as much the anti-Tobacco lobby state that smokers should simply quit, we know that is not going to happen.
So what is the bottom line?
Our results suggest that a proposed national e-cigarette tax of $1.65 per milliliter of vaping liquid would raise the proportion of adults who smoke cigarettes daily by approximately 1 percentage point, translating to 2.5 million extra adult daily smokers compared to the counterfactual of not having the tax. (Pesko et.al 2020)
If the Minnesota tax was replicated across the US:
If this tax were imposed on a national level about 1.8 million smokers would be deterred from quitting in a ten year period. The taxation of e-cigarettes at the same rate as cigarettes could deter more than 2.75 million smokers nationally from quitting in the same period. (Saffer et.al 2020)
If taxation has such a huge impact leading to premature death and unnecessary health costs, just imagine what prohibition is doing.
The results are actually worse for ‘public health’ officials and their lick spittle political masters.
From Pesko et.al (2020):
A $1.00 traditional cigarette excise tax increase increases current vaping by 0.3 ppts (p > 0.10), or 7.4%, and everyday vaping by 0.2 ppts (p < 0.05), or 14.2%, suggesting that the two products are economic substitutes. Traditional cigarette taxes also increase dual use of both tobacco products by 0.3 ppts (p < 0.05), or 17.2%, and any use of either product by 0.2 ppts (p > 0.10), or 1.3%. These results suggest that smokers use ecigarettes when traditional cigarette taxes rise, either to continue to consume some portion of their regular nicotine at a lower relative price or as a means to quit smoking.
We find that a $1.00 increase in tax per fluid ml of vaping liquid increases daily smoking propensity by 0.6 ppts (p < 0.05) or 5.3%. A $1.00 increase in tax per fluid ml of vaping liquid reduces the probability of current vaping by 0.5 ppts (p < 0.10) or 15.3% and the probability of daily vaping by 0.2 ppts (p > 0.10) or 14.2%. Finally, we observe that a $1.00 increase in tax per fluid ml of vaping liquid reduces the probability of dual use by 0.4 ppts (p < 0.10), or 24.4%. Collectively, these findings further suggest that traditional cigarettes and e-cigarettes are economic substitutes. Ecigarette taxes may reduce dual use rates by discouraging adult smokers from trying to use e-cigarettes to quit.
Australia has the highest tobacco excise in the world. This should be leading to a massive substitution away from combustible tobacco products to less harmful products. Instead it is leading to people buying their smokes on the black market. Not only is the Australian government pursuing policies that makes it difficult for smokers to make better choices, it is making them criminals too.
The Australian government would rather see people die than lose tobacco excise revenue.