Learn More about Health Economics and E-Cigarette Regulations from Michael F. Pesko, PhD | Center on Addiction

Learn More about Health Economics and E-Cigarette Regulations from Michael F. Pesko, PhD

Learn More about Health Economics and E-Cigarette Regulations from Michael F. Pesko, PhD


As part of our Addiction Speaker Series, in which leading experts present their latest findings, Dr. Michael F. Pesko, a health economist and an Assistant Professor at Weill Cornell Medical College, spoke about his research on evaluating health policy changes, especially those affecting e-cigarette users, in his talk "E-cigarette Regulations: Evaluating Intended and Unintended Effects." We interviewed Dr. Pesko to hear more about this fascinating research.

First, what is health economics?

Health economists are often interested in questions related to if we raise the “cost” of a product, what effect will it have on use of that product and any similar products? “Cost” may be monetary, such as taxes, or it could be non-monetary, such as increasing the “hassle costs” of obtaining a product, or learning that the product is more risky than previously thought. Health economists are interested in the effect of monetary costs like taxes, but also the effect of non-monetary costs, like warning labels and age purchasing laws. When monetary or non-monetary costs are raised, health economists assume that it will reduce purchasing of that product, but we are also often interested in determining by how much.

How might this kind of research explain a smoker switching to e-cigarettes?

Increasing the costs of one product may also change demand for a similar product. For example, cigarette taxes may reduce demand for cigarettes, but may also increase demand for e-cigarettes. So health economists often study these “spillover” relationships as well.

With the heavy taxation of cigarettes, especially in many urban areas, will we see more adolescents in cities using e-cigarettes versus in rural areas? What has been the trend of urban versus rural so far for e-cigarettes or other alternative tobacco products?

In looking at the Population Assessment of Tobacco and Health data for 2013-2014, it seems like e-cigarette use is fairly similar for youth and adults in urban and rural areas. This is despite cigarette and smokeless tobacco use being higher in rural areas. It’s not immediately obvious to me what may be causing relatively higher e-cigarette use in urban versus rural areas compared to the use of other tobacco products, so this would be an excellent topic for future research.

What do you see as the possible impact of e-cigarette regulation on purchasing cigarettes for new smokers?

In general, I think we can expect that regulations of e-cigarettes will reduce the willingness among cigarette users to try e-cigarettes to quit smoking. This could translate into higher cigarette use, which would be bad from a public health perspective if e-cigarettes are substantially safer products. The evidence so far from two published e-cigarette minimum purchase age law papers suggests that more teenagers use e-cigarettes to quit or reduce regular cigarette use than use e-cigarettes to initiate into regular cigarette use.

What is the evidence that warning labels, taxes, or minimum purchase ages for e-cigarettes might really work, especially for teenagers and young adults? 

Few studies have been published on possible effects of these regulations on e-cigarette use, making this a great area for future research. Among adults, there is evidence to suggest that e-cigarettes and cigarettes are substitute goods, so that if you raise the tax of one, you can expect to find an increase in the use of the other. According to Monitoring the Future data, this pattern of substitution is also present among youth.

In a study that I co-authored and published in the journal Addiction, we found that among adult smokers, the U.S. Food and Drug Administration’s (FDA) new warning label had a decrease in the number of adult smokers switching to e-cigarettes compared to no warning label, so this could carry over to youth as well. However, even before the FDA implemented the required warning label, many manufacturers were voluntarily including a similar warning, so the actual change will be little.

Regarding minimum purchase ages for e-cigarettes, a study that I co-authored, which was published in the journal Preventive Medicine, found that e-cigarette purchasing laws have had the unintended effect of increasing use of e-cigarettes among youth. This could be a reason to not use the same minimum purchasing age for both cigarettes and e-cigarettes, and to set the e-cigarette purchasing age to something lower, to incentivize young cigarette users to switch to e-cigarettes. One idea, in light of the movement to raising the cigarette minimum purchasing age to 21, would be to leave the e-cigarette minimum purchasing age at 18.

Michael F. Pesko, PhD

Dr. Pesko is a health economist and an Assistant Professor at Weill Cornell Medical College



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