Intended and Unintended Effects of Banning Menthol Cigarettes

Christopher Carpenter, Hai V. Nguyen

NBER Working Paper No. 26811
Issued in February 2020
NBER Program(s):Health Economics

Bans on menthol cigarettes have been recommended by the World Health Organization, adopted throughout the European Union, and proposed by the United States Food and Drug Administration (FDA), primarily due to concerns that menthol cigarettes enable youth smoking. Yet there is almost no direct evidence on their effects using real-world policy variation. We provide the first comprehensive evaluation of this policy by studying Canada where seven provinces banned menthol cigarettes prior to a nationwide menthol ban in 2018. Using provincial sales data, we show that menthol cigarette sales fell to zero immediately after menthol bans, with no meaningful effect on non-menthol sales. Survey data confirm that provincial menthol bans significantly reduced menthol cigarette smoking among both youths and adults. We also find strong evidence of substitution, however: provincial menthol bans significantly increased non-menthol cigarette smoking among youths, resulting in no overall net change in youth smoking rates. We also document evidence of evasion: provincial menthol bans shifted smokers’ cigarette purchases away from grocery stores and gas stations to First Nations reserves (where the menthol bans do not bind). Our results demonstrate the importance of accounting for substitution and evasion responses in the design of stricter tobacco regulations.

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Document Object Identifier (DOI): 10.3386/w26811

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