SELINSGROVE — New research from Susquehanna University's Sigmund Weis School of Business finds that electronic cigarettes — which have grown in popularity among teenagers — could be priced or taxed to the point of dissuading use of the products.
Matthew Rousu, dean of the business school, and Bailey Hackenberry an economics
and finance double major in the Class of 2021, published their article, "Estimating the Price Elasticity of Demand for JUUL E-cigarettes among Teens," in the journal Drug and Alcohol Dependence.
"The widespread popularity of e-cigarettes has led to an alarming increase in teen nicotine use, reversing a 40-year trend," Rousu said. "One key question is how sensitive teens' demand for e-cigarettes is to changes in price."
To answer this question, Hackenberry and 2019 graduate Kyle Kern gave participants,
all 18 and 19 years old, $20 and asked them how much they would be willing to pay for e-cigarette products. The price randomly varied per participant.
"We found that a 10% increase in price led to as much as a 24% reduction in demand
among teens using nicotine, and as much as a 45% reduction among teens not currently using nicotine," Hackenberry said. "The teens in our study were more price sensitive than older adults who took part in a similar study earlier."
From a public health standpoint, these are promising results, Rousu said.
"High e-cigarette taxes may dissuade relatively few older adult cigarette smokers from switching to e-cigarettes," he said, "but at the same time, a carefully calibrated e-cigarette tax could be highly effective at preventing teens from becoming e-cigarette users in the first place."
This research was funded by a grant from the National Institutes of Health.