Impact of a low to no nicotine cigarette? A choice experiment to identify economic and policy implications

The technology is available to product cigarettes with low to no nicotine. Such cigarettes are currently used primarily for investigational purposes only. But, the FDA is considering mandating reduced levels of nicotine in cigarettes so that they cease to be addictive, which will  indirectly reduce consumption of toxins. But additional information is needed to optimize potential regulations. Specifically information is needed on the market impacts of reducing nicotine levels. Also, because the FDA has the authority not only to regulate levels of nicotine, but also other ingredients in tobacco cigarettes, information is needed on the trade-offs in the demand for nicotine (which governs addiction level) and other ingredients, such as tar. Tar is a key ingredient that harms health.

We conduct a choice experiment to elicit smokers’ preferences for tobacco cigarettes versus e-cigarettes across a number of different nicotine levels. A key question is how do smokers trade-off these two products and levels of nicotine across these products. Embedded in these trade-offs is the inherent difference in tar levels across these products: e-cigarettes do not have tar while tobacco cigarettes do. We also focus on key policy-relevant issues that might affect these trade-offs including: bans on smoking in public places, and product price. Using price in the trade-off scenarios also allows us to derive willingness-to-pay measures and evaluate changes in consumer surplus. We allow smokers to select tobacco cigarettes, e-cigarettes, both or neither. Thus, we can investigate the role of ’dual use’ of both types of cigarettes. We also examine heterogeneity across sets of smokers following findings from our previous analysis. In an attached survey we follow-up with questions that help us to distinguish across those who want to use e-cigarettes to reduce, the harm of smoking and/or qui versus those who use to maintain their tobacco smoking. The choice experiment allows us to simulate the effects of potential changes to policy. This is useful for predicting the impact of current policy decisions on future market shares and health impacts. We provide economic evidence so that policy makers are well-placed to evaluate the effects of reducing nicotine levels in cigarettes and can set targeted policies to maximize public health.