Increasing cigarette exercise taxes may have the unintended consequence of encouraging consumers to seek higher nicotine content and more dangerous cigarette products, according to study.
Increasing cigarette exercise taxes may have the unintended consequence of encouraging consumers to seek higher nicotine content and more dangerous cigarette products, according to a study.
The study shows that while counter-marketing techniques often reduce total consumption of cigarettes, increasing cigarette taxes per package shifts some consumers to higher nicotine products.
Over the past 50 years, regulators and advocacy groups have increasingly used marketing tools to discourage cigarette consumption. Excise taxes are used to increase prices faced by consumers. Educational advertising is used to increase awareness of health risks and decrease preferences for the category. Smoke-free policies are used to make cigarette consumption less convenient.
One interesting element of tobacco counter-marketing is that policies tend to be established and implemented at the state level, Yanwen Wang said. “This is important because the variation in policies across states enables natural experiments with different approaches. These natural experiments allow researchers to determine the relative effectiveness of different anti-smoking efforts.”
The study has significant implications for regulators and advocacy groups. First, the results suggest that health advertising and excise taxes are both effective tools. Health-oriented advertising is a particularly strong technique, as this method does not lead to shifts towards more dangerous (higher nicotine) products.
Second, the results suggest that simple per-pack tax policies should be re-evaluated. While regulators may be leery of nicotine-based taxing schemes that seem to communicate that “lower” nicotine products are less dangerous, this feared result should be weighed against direct empirical evidence that flat taxes lead many consumers to shift towards more dangerous products.
The study results also suggest that regulators should pay special attention to disparate impacts across communities.
The study appears in Marketing Science.