Association for Public Policy Analysis & Management

E-cigarettes are battery-operated devices that simulate smoking. The device heats a liquid, which often contains nicotine -- the addictive ingredient in tobacco products -- and flavors, into a vapor which is inhaled by the user. E-cigarettes were developed in China in 2003 and are becoming increasingly popular worldwide. Global sales of e-cigarettes exceeded $11B in 2016 and 15% of U.S. adults have used these products.

E-cigarette use has progressed in a largely unregulated environment in the U.S. and there is controversy regarding the health effects of these products. E-cigarettes are generally believed to be less harmful than tobacco cigarettes for smokers and non-smokers, and may help some smokers quit. The potential for harm reduction -- that is addicted smokers who cannot quit tobacco products can consume nicotine in a less harmful manner -- could be important as 15.5% of U.S. adults smoke. There are concerns among some public health advocates that e-cigarettes may re-normalize smoking, help smokers circumvent indoor smoking bans, act as a gateway product to tobacco cigarettes, and that the health benefits of e-cigarettes are over-stated.

Faced with this controversy, governments in the U.S. are determining whether and how to establish e-cigarettes policies. Communication strategies based on the risks of e-cigarettes and tobacco cigarettes are emerging. At the same time, e-cigarette companies spend millions of dollars each year advertising these products to consumer: in 2012 these companies spent $18.3M on advertising and this number is escalating. Tobacco cigarette companies are increasingly entering the e-cigarette market which suggests that advertising efforts may become even more aggressive in the future. This confluence of factors suggests that there is substantial scope for communication efforts to shape e-cigarette demand.

Understanding how consumers incorporate information on the relative risks of e-cigarettes and tobacco cigarettes is important to inform government policies related to these products. Neoclassical economics predicts the format in which information is conveyed is irrelevant for consumer choice. Behavioral economics suggests that format, ‘choice architecture', has an important role in consumer decisions and highlight the importance of information source

We provide the first evidence on whether and how information source affects adult smokers' intentions to use e-cigarettes and tobacco cigarettes, and risk perceptions about these products. We take an experimental approach in which we present adult smokers with information on the health benefits of e-cigarettes vis-a-vis tobacco cigarettes. We vary the information source and compare intentions to use e-cigarettes and tobacco cigarettes, and product risk perceptions in the various experimental arms. We select three information sources: government (FDA), physicians, and private companies (proxied by a fictitious e-cigarette company).

Our findings suggest that information source plays an important role in how consumers incorporate information into decision making and their choices. Private companies have a substantial influence on smokers' intention to use e-cigarettes, but not tobacco cigarettes, and consumers’ risk perceptions of both products. Government and physician sources are generally not important predictors of our outcomes. These findings imply that private companies may play a substantial role in shaping future adult demand for e-cigarettes.