The impacts of product characteristics and regulatory environment on smokers’ preferences for tobacco and alcohol: Evidence from a volumetric choice experiment
Research article
Background
This study conducted a volumetric choice experiment (VCE) to examine how excise taxes, the availability of alcohol-flavored e-cigarettes, and indoor use restrictions on tobacco may influence individuals’ stated consumption of alcohol (beer, wine, liquor), e-cigarettes (disposables and refillable cartridges), and cigarettes among adults who reported currently using alcohol, e-cigarettes, and cigarettes.
Research has established a strong link between tobacco use and alcohol consumption at the population, environmental, individual, and biological levels.
- First, tobacco and alcohol use may reinforce each other.
- Studies have shown that ethanol, and therefore all types of alcoholic beverages, increases smoking among people with alcoholism, and that smokers and e-cigarette users showed increased risks of heavy alcohol use compared to non-smokers and non-e-cigarette users
- In addition, alcohol use in bars is consistently linked with high smoking rate among young adults regardless of tobacco control policies.
- Second, tobacco companies often linked cigarettes with alcohol in their marketing and promotion (e.g., tying cigarette and alcohol purchases together) to prolong the use of both substances.
- As a result, concurrent use of tobacco and alcohol has been widely documented in the literature, which further shapes the use behaviors of both products, such that attempts to quit smoking are often hindered by concurrent alcohol use.
Given the relationship between alcohol and nicotine/tobacco products, policies aimed at reducing the use of one substance may have a spillover or cross-product effect on the other.
- For instance, increasing cigarette taxes and imposing restrictions on smoking in public places such as restaurants and bars have been found to reduce heavy and binge alcohol use. These policies are also linked with a reduced likelihood of alcohol consumption.
However, the majority of studies examining the link between tobacco use and alcohol consumption have primarily focused on cigarettes and beer, which may limit their relevance to the current tobacco use landscape in the US, where e-cigarettes have overtaken cigarettes as the most used nicotine/tobacco product among youth and young adults.
Key Findings
Raising alcohol taxes works
Increasing prices through raising taxes significantly reduces the consumption of cigarettes, beer, and liquor/wine. Specifically, the researchers found price elasticities to be for
- beer -0.10,
- liquor/wine -0.11, and
- cigarettes -0.16.
Higher beer (cross-price elasticity = 0.13) and liquor/wine prices (cross-price elasticity = 0.05) increased e-cigarette consumption.
E-cigarettes are economic substitutes to beer and liquor/wine for adult smokers who use multiple substances.
A 10% increase in beer or wine/liquor prices will increase e-cigarette consumption among this group by 1.25% and 0.5%, respectively. This evidence provides support to increase taxes on alcoholic beverages, which has been declining since 1970 due to infrequent tax increases and inflation erosion. Increasing alcohol prices have the potential to lead to harm reduced tobacco use among this group.
Smoke-free venues and alcohol use
For adults who use multiple substances, their purchases of alcoholic beverages did not respond to whether cigarettes or e-cigarettes are allowed/banned indoors. It is possible that smoke-free indoor places may have become a norm as a consequence of the increasing implementation of comprehensive smoke-free air laws. Therefore, the impact of such laws on alcohol consumption may have become non-significant. In addition, as the participants are established cigarette and alcohol co-users, they may not respond to tobacco indoor policies by adjusting alcohol use.
Alcohol flavored e-cigarette use
Tobacco and alcohol use also intersects when tobacco products are characterized as alcohol flavored. Although the 2009 Family Smoking Prevention and Control Act (FSPTCA) has banned flavored cigarettes except for those with mint-, menthol, or tobacco flavors, alcohol flavors are still available in nicotine or tobacco products other than cigarettes. There is strong evidence that links flavors with youth initiation of nicotine or tobacco products.
The study found that alcohol flavors in e-cigarettes did not have a significant impact on alcohol purchase or tobacco purchases. This is likely because while alcohol flavors were common in e-cigarettes, the most appealing or prevalent flavors are fruit or sweet flavors. Therefore, for adults who use multiple substances (e-cigarettes, cigarettes, and alcohol), it is unlikely that prohibiting alcohol flavors in e-cigarettes will lead to any significant behavioral changes.
Meaning of the study findings
Smoking and alcohol use are known risks for cancer, and alcohol and tobacco are consumed concurrently to a high degree. Therefore, regulating nicotine/tobacco products may have spillover effects on alcohol consumption and regulating alcohol products may have spillover effect on nicotine/ tobacco products consumption.
There is a great opportunity to optimize the public health benefits of tobacco control and alcohol policies through coordinated actions that take into account cross-product policy impacts (i.e., how the regulation of one product impacts the consumption of another).
For adult smokers who also consume alcohol and use e-cigarettes, increasing prices on these products will not lead to unintended consequences. Moreover, increasing alcohol prices may incentivize smokers to purchase more e-cigarettes, which has the potential to motivate complete transitions from cigarette smoking to e-cigarette use among this group.
The evidence from this study can help policymakers by considering multiple products simultaneously and taking into account of cross-product policy impacts beyond cigarette-e-cigarette price elasticities or cigarette–beer price elasticities that have been studied previously
Finding from this study could provide important empirical evidence in shaping local, state, and federal policies regulating tobacco and alcohol products, including the design of excise taxes, implementation of tobacco indoor use restrictions, and ban on alcohol-flavored e-cigarettes.
A unique contribution of this study is accounting for product heterogeneity (different tobacco and alcohol products) and the focus on how policies regulating one product hypothetically impact the consumption of another, providing novel experimental evidence that addresses confounding issues in previous studies using survey data or retail sales data
Abstract
Objective
Concurrent use of alcohol and cigarettes is well-documented in the literature. However, it is unclear how e-cigarette regulations in a growing number of localities impact the use of tobacco and alcohol in the US.
This study aims to evaluate the impacts of excise taxes, tobacco use restrictions in restaurants/bars, and availability of alcohol flavor in e-cigarettes on tobacco consumption, and their cross impacts on alcohol consumption.
Method
A total of 181 US adult smokers who were using e-cigarettes and consuming alcohol participated in online volumetric choice experiments and reported on the quantity they would purchase among cigarettes, closed-system e-cigarettes, beer, and one other alcohol product (wine/liquor) under varying policy scenarios.
Results
Estimated own-price elasticities of demand were for
- beer -0.10,
- liquor/wine -0.11, and
- cigarettes -0.16.
Higher beer (cross-price elasticity = 0.13) and liquor/wine prices (cross-price elasticity = 0.05) increased e-cigarette consumption.
If e-cigarettes were allowed in bars/restaurants, their consumption increased by 2.4 units, and if cigarettes were allowed in bars/restaurants, e-cigarette consumption increased by 1.9 units, relative to the mean consumption level.
Greater reported weekly spending on alcohol and/or tobacco was linked with higher consumption of all products.
Conclusions
Higher taxes or prices may reduce the consumption of beer, liquor/wine, and cigarettes.
E-cigarettes are economic substitutes for alcohol among smokers who are currently consuming alcohol and using e-cigarettes. Regulating tobacco indoor use will have an impact on e-cigarette consumption.