We’ve news from the government that the use of e-cigarettes, or vaping, is on the rise among schoolchildren and teenagers. We might think that this is a health story and it is, but behind it is an interesting little economic point and a guide to public policy. The question really revolves around whether vaping is a substitute for smoking or a complement (yes, complement, not compliment).
Here’s something from the government report:
Daily cigarette smoking has decreased markedly over the past five years (almost 50 percent) across all grades. For eighth graders, it dropped to 1.4 percent compared to 2.7 percent five years ago. Among 10th graders, it dropped to 3.2 percent compared to 6.3 percent five years ago. Among high school seniors, it dropped to 6.7 percent, down from 8.5 percent last year and 11.2 percent five years ago.
“Despite the positive developments this year, we are concerned about the levels of e-cigarette use among teens that we are seeing,” said Lloyd D. Johnston, Ph.D., principal investigator, Institute for Social Research, University of Michigan. “It would be a tragedy if this product undid some of the great progress made to date in reducing cigarette smoking by teens.”
The worry in that second paragraph seems to be that greater e-cigarette usage will lead to greater cigarette usage at some future point. But as the NY Times emphasises from the same report that information in the first paragraph:
E-cigarettes have split the public health world, with some experts arguing that they are the best hope in generations for the 18 percent of Americans who still smoke to quit. Others say that people are using them not to quit but to keep smoking, and that they could become a gateway for young people to take up real cigarettes.
But that does not seem to be happening, at least so far. Daily cigarette use among teenagers continued to decline in 2014, the survey found, dropping across all grades by nearly half over the past five years. Among high school seniors, for example, 6.7 percent reported smoking cigarettes daily in 2014, compared with 11 percent five years ago.
That halving of teen smoking rates coincides with the invention and introduction of vaping (overlaps at least, the first devices really came in 2007). And other studies show very much the same thing. People use vaping equipment instead of smoking, not as a gateway to it nor does vaping increase smoking prevalence. It is thus a substitute, not a complement. As such of course it is to be greatly welcomed. Sure, everyone (adult at least) should be free to chart their own course to the grave and if that includes coughing up their lungs after decades of smoking so be it. And similarly there’s a public health interest in minimising the number of people who do. So tax tobacco until the eyes water (along with the general interest in taxing things with highly inelastic demand) and do discourage the practice.
However, we do have rather a Baptists and bootleggers situation going on here. There are those who, as with the Baptists and booze, think that any drug use, even the inhalation of nicotine, is simply wrong, perhaps even evil. It should thus be entirely expunged from our society. And there’s also those over in Big Pharma who have invested very large sums (it really does cost up to $1 billion to bring a new drug to market) in various pharmaceutical smoking cessation aids. And they would be very interested in being able to market those without having to face the competition of a $3 piece of electronics assembled in a shed in China. It’s this that gives us the background to the discussions about whether the FDA should be regulating e-cigarettes. Should the technology have to support the costs faced by the drugs industry or not? Given that it’s not a drug probably not but that’s the way the debate is being run.
If e-cigarettes were a complement to smoking then the answer would run the other way: sure, their use should be discouraged and so on. Given that all the evidence we have is that they’re a substitute then it runs this way. That vaping, at least so far as we know, is the most successful smoking cessation product any one has as yet invented (and do note that nothing else at all has halved teen smoking rates in only 5 years) means that we really shouldn’t be putting roadblocks in front of further adoption of the technology. A slightly closer look at the details might be appropriate but why one earth would we want to derail what works? Unless we were against the very idea of nicotine on either moral or business competition grounds?
My latest book is “23 Things We Are Telling You About Capitalism” At Amazon or Amazon UK. A critical (highly critical) re-appraisal of Ha Joon Chang’s “23 Things They Don’t Tell You About Capitalism”.