The Economics of Electronic Nicotine Delivery Systems: Advertising and Outcomes

Electronic Nicotine Delivery Systems (ENDS), of which e-cigarettes constitute the most common sub-product, are a non-combustible alternative to smoking. Only recently introduced into the US market, ENDS have been aggressively promoted, and use is increasing rapidly among both adults and youths. In 2013, 15% of adults reported having used e-cigarettes, compared with 0.6% just four years ago. Almost 1.78 million middle- and high-school students reported use in 2012, more than double the prevalence from just one year ago. Concurrently, advertising grew almost 15-fold between 2010-2013, with youth exposure to TV ads rising 256% between 2011 and 2013. Very little is known about the long-term health effects of using ENDS, and how ENDS use affects smoking. At the heart of the regulatory debate are fundamental questions regarding whether ENDS will draw cigarette smokers away from a dangerous habit or lure new initiates into tobacco use and lead to a new generation of nicotine addicts. The FDA and the 2014 Surgeon General’s Report acknowledge both sides of this debate, but underscore the need for scientific evidence to inform these questions. Despite calls from attorneys general from 29 states for stricter marketing restrictions, the FDA refrained from including any such restrictions in its recent ruling. There is no rigorous evidence base on the impact of ENDS advertising and other policies on patterns of ENDS and tobacco use. We will address this knowledge gap by undertaking the first comprehensive analyses of the extent to which advertising of ENDS in magazines and on TV (constituting almost 90% of media ad spending), online as banner ads, and in social media impacts patterns of ENDS use among both adults and youths, as well as transitions between ENDS use and smoking behaviors, including initiation, cessation, and relapse among formers smokers. Furthermore, the project will also provide some of the first estimates to inform key knowledge gaps identified by state tobacco control program managers relating to other policy factors such as smoke-free legislation, restrictions on availability and use, and tobacco taxes and ENDS. We will further explore heterogeneity in the advertising and policy responses across relevant margins (initiation vs. cessation; intensive vs. extensive), across youths and adults, and across various other socio-demographic factors. These questions will be assessed using six large-scale national individual-level datasets, each with distinct strengths and many of them with longitudinal or retrospective information, matched with unique and detailed information on advertising exposure and a vector of tobacco control policies. The proposed research is essential for understanding the public health impact of ENDS and will provide the needed evidence to support the FDA’s regulatory decisions over marketing as well as guide state policy-makers in their regulations.