Unintended Consequences

Raising taxes on vapor products may increase cigarette sales, according to a study co-authored by Catherine Maclean, a Temple University economics professor.

Maclean, along with five other researchers, analyzed the effects of e-cigarette taxes on their prices and sales as well as the sales of other tobacco products in eight states and two large counties. They found that when the price of a vapor product increases, consumers buy less of the product and buy more cigarettes.

“This is a well-established fact within economics in the context of economic substitutes,” Maclean said. “Basically, consumers view the products as alternative sources of nicotine.”

Lawmakers may not be aware of the effects these increases might have on cigarette sales and consumption, Maclean said. “I think they consider the products in isolation. For instance, a policy maker wants to reduce vaping and thus decides to tax the product but does not think about what [impact] the tax might have on smoking outcomes.”