The Experimental Tobacco Marketplace: Demand and Substitutability as a Function of Cigarette Taxes a

Derek A Pope, PhD, Lindsey Poe, BS, Jeffrey S Stein, PhD, Brent A Kaplan, PhD, William B DeHart, PhD, Alexandra M Mellis, PhD, Bryan W Heckman, PhD, Leonard H Epstein, PhD, Frank J Chaloupka, PhD, Warren K Bickel, PhD.
The Experimental Tobacco Marketplace: Demand and Substitutability as a Function of Cigarette Taxes and e-Liquid Subsidies.
Nicotine & Tobacco Research, ntz116, https://doi.org/10.1093/ntr/ntz116.

The experimental tobacco marketplace (ETM) approximates real-world situations by estimating the effects of several, concurrently available products and policies on budgeted purchasing. Although the effects of increasing cigarette price on potentially less harmful substitutability are well documented, the effects of other, nuanced pricing policies remain speculative. This study used the ETM as a tool to assess the effects of two pricing policies, conventional cigarette taxation and e-liquid subsidization, on demand and substitutability. E-liquid functioned as a substitute for conventional cigarettes across all conditions. Increasing cigarette taxation and e-liquid subsidization increased the number of participants for which e-liquid functioned as a substitute. Cigarette taxation decreased cigarette demand, by decreasing demand intensity, and marginally increased the initial intensity of e-liquid substitution, but did not affect the functions’ slopes (substitutability). E-liquid subsidization resulted in large increases in the initial intensity of e-liquid substitution, but did not affect e-liquid substitutability nor cigarette demand.