The impact of e-cigarette and cigarette prices on e-cigarette and cigarette sales in California

Although numerous studies have examined the impact of cigarette prices on cigarette demand, research examining the impact of e-cigarette and cigarette prices on e-cigarette demand is relatively limited. This study estimated the impact of e-cigarette and cigarette prices on e-cigarette and cigarette sales in California. Using the 2012-2017 Nielsen Retail Scanner Data, we constructed e-cigarette prices, cigarette prices, and per capita e-cigarette and cigarette sales by year, quarter, and Nielsen scantrack market in California. E-cigarettes were categorized as disposable or reusable. Separate fixed-effects models estimated the impact of e-cigarette and cigarette prices on per capita disposable e-cigarette, reusable e-cigarette, and cigarette sales controlling for year, quarter, market, and smoke-free air law coverage. Average prices were $5.86 per pack of 20 cigarettes, $9.80 per disposable e-cigarette, and $19.11 per reusable e-cigarette. When prices of disposable e-cigarettes, reusable e-cigarettes, and cigarettes increased by 1%, per capita sales of the products decreased by 0.37%, 0.20%, and 0.21% respectively. Cigarette prices were positively associated with per capita sales of reusable e-cigarettes, indicating reusable e-cigarettes are substitutes for cigarettes. Reusable e-cigarette prices were positively associated with per capita sales of disposable e-cigarettes, indicating disposable e-cigarettes are substitutes for reusable e-cigarettes. No statistically significant association was found between disposable/reusable e-cigarette prices and cigarette sales. Our results suggest that raising prices of disposable e-cigarettes, reusable e-cigarettes, and cigarettes such as via tobacco excise tax increases would result in reduced sales for the products. Policymakers should consider the substitution between e-cigarettes and cigarettes when designing tobacco control policies.