A study by Yale Professor Abigail Friedman and Georgia State University Professor Michael Pesko has found higher vaping taxes boost sales of combustible cigarettes.
The researchers examined the impact that tax increases on vaping products had on both e-cigarette usage and traditional combustible cigarette smoking, specifically researching the impact on young consumers (ages 18-25), according to Fee.org.
The study found that as taxes increase on vaping products, vaping decreases. It also shows that higher taxes on vaping products leads to an increase in traditional cigarette smoking among young people.
“A one dollar increase in [vaping] taxes yielded significant reductions in young adults’ daily vaping alongside increases in recent smoking,” the authors find.
The researchers ultimately conclude that “higher taxes on electronic nicotine delivery systems (ENDS) are associated with decreased ENDS use but increased cigarette smoking among 18-25 year-olds.”
This is what’s known as the “substitution effect,” defined by Investopedia as “the decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives when its price rises.”