Work

Mostly harmless regulation? Electronic cigarettes, public policy, and consumer welfare

Year: 2020

Type: article

Abstract: Electronic cigarettes are a less harmful alternative to combustible cigarettes. We analyze data on e-cigarette choices in an online experimental market. Our data and mixed logit model capture two sources of consumer optimization errors: overestimates of the relative risks of e-cigarettes and present bias. Our novel data and policy analysis make three contributions. First, our predictions about e-cigarette use under counterfactual policy scenarios provide new information about current regulatory tradeoffs. Second, we provide empirical evidence about the role consumer optimization errors play in tobacco product choices. Third, we contribute to behavioral welfare analysis of policies that address individual optimization errors. Compared with standard cost-benefit analysis, our behavioral welfare economics analysis leads to much larger estimates of the costs of policies that discourage e-cigarette use or the benefits of policies that encourage e-cigarette use.

Source: Health Economics

DOI: 10.1002/hec.4136

Authors: Donald S. Kenkel, Sida Peng, Michael F. Pesko, Hua Wang

Institutions: Cornell University, Microsoft (United States), Georgia State University

Language: English

Topic: Smoking Behavior and Cessation

Subfield: Physiology

Field: Medicine

Domain: Health Sciences

SDG: Good health and well-being

Open Access status: green

Funders: National Institutes of Health, National Institute on Drug Abuse, National Cancer Institute