Association for Public Policy Analysis & Management

With the recent growth in e-cigarette use, a critical question is whether they will improve public health or exacerbate tobacco use problems. Understanding this requires knowledge of smokers’ demand for both combustible and e-cigarettes and their substitutability. In part, the demand for e-cigarettes is a function of the wide array of available flavors; particularly since non-menthol flavors are banned in combustible cigarettes. As such, the FDA has proposed a ban on all flavors in e-cigarettes. A complication for regulators is that banning flavors in e-cigarettes may result in increased smoking of combustible cigarettes, which are thought to be more harmful than e-cigarettes.

 In this paper, we consider the effect of the proposed FDA ban on flavors in e-cigarettes. We estimate and predict adult smokers’ and recent quitters’ demand for combustible cigarettes and flavored e-cigarettes. We conduct a discrete choice experiment (DCE) in which respondents choose between combustible cigarettes and e-cigarettes with varying flavors and other attributes. We use a representative sample of 2017 adults in the US, ages 18-64. We use choice models to estimate preferences for flavored cigarette types; importantly, accounting for preference heterogeneity in smokers’ utility. We then predict the demand for each cigarette type under alternative policies that ban flavors.

Our model estimates suggest that flavors have a sizeable impact on demand for cigarette types. Our predictions suggest that the proposed e-cigarette flavors ban would drive e-cigarette users back to combustible cigarettes, which would likely hurt public health. Also, because quit attempters are attracted to the flavors in these products, there may be further negative implications. We consider alternative flavor ban options that would not be as harmful to public health. We are the first to provide multi-product, multi-flavor, nationally representative evidence on a set of alternative flavor ban options across cigarette types.