Evaluating an Excise Tax on Electronic Consumption: Early Results

Michael S. Amato, PhD Raymond G. Boyle, PhD, MPH

Objectives: Minnesota simultaneously raised taxes on and e-cigarettes in 2013. This is the first study to report the effect of a tax increase on e-cigarette sales.Methods : Sales data for convenience stores in Minneapolis (case) and St. Louis (control) were obtained from the Nielsen Company, for 2012-2013, aggregated in 4-week time periods. We compared change over time in sales of e-cigarettes in Minneapolis versus St. Louis, where and e-cigarette taxes were unaltered. Results: Adjusted sales of e-cigarettes over time in the 2 markets were similar be- fore the tax increases. Minneapolis prices of the 4 most popular products increased a mean of 21.44% after the tax increase. Immediately post-tax, there was a significant increase in total sales in Minneapolis (p < .01). Sales remained above expected values for one additional time period, before dropping significantly below expected values for the 4 final time periods. Sales increases were driven by gains for Blu e-cigarettes, then owned by Lorillard, compared to sales decreases for NJOY products. Conclusions: In Minnesota, simultaneous tax increases on cigarettes and e- cigarettes were associated with a short-term spike in e-cigarette consumption at convenience stores, followed by a decline.

Key words: e-cigarettes; tax, policy; price; consumption; sales Tobacco Regulatory Science. 2016;2(2):123-132 DOI: http://dx.doi.org/10.18001/TRS.2.2.3

espite recent rapid increases in the preva- rettes. To our knowledge, only a single published lence of (e-cigarette) study has examined the relationship between e-cig- use by youth1 and adults,2 federal regula- arette price and demand. Huang, Tauras, and Cha- Dtions governing their manufacture, sale, and adver- loupka5 examined retail sales data from 2009-2012 tising in the United States (US) are still pending. in 52 US markets, and found overall own price In that regulatory vacuum, state and local govern- elasticities of -1.2 for disposable e-cigarettes and ments have used new and existing laws to restrict -1.9 for reusable e-cigarettes. Those results suggest youth access and protect nonusers’ rights to clean that e-cigarette sales may be 2-3 times more sensi- air.3 Excise tax increases that raise consumer prices tive to price than combustible cigarettes. are one of the most effective policies However, Huang et al5 did not find a consistent available for reducing consumption of combustible relationship between e-cigarette sales and the price cigarettes and prevalence; however, as of of combustible cigarettes. Discussing that unex- summer of 2015, excise taxes are currently applied pected result the authors speculated that 2 op- to e-cigarettes in only 2 US states – Minnesota and posing factors, which vary across states, may have North Carolina.4 prevented them from observing a clear relationship An evidence base for understanding the effects of – the strength of tobacco control policies and the tobacco product excise taxes on consumption and marketing strategies of the tobacco companies. On use of e-cigarettes will be critical as policymakers the one hand, strong tobacco control policies (high consider how best to protect public health in an cigarette taxes and smoke free policies) may encour- evolving tobacco landscape that includes e-ciga- age consumption of e-cigarettes as substi-

Michael S. Amato, Postdoctoral Research Fellow, ClearWay Minnesota, Minneapolis, MN. Raymond G. Boyle, Director of Research, ClearWay Min- nesota, Minneapolis, MN. Correspondence Dr Amato; [email protected]

Tobacco Regulatory Science. 2016;2(2):123-132 123 Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results tutes or cessation aids. On the other hand, states one of the 2 states where a tax has been implement- with weak tobacco control policies contain more ed, appears to require consideration of the larger smokers per capita; those more concentrated pools tobacco control environment in which it occurred. of potential customers may attract a disproportion- Since 1998, when Minnesota’s lawsuit against the ate amount of e-cigarette marketing dollars, which major cigarette companies produced a settlement also would be expected to encourage consumption agreement that established and funded an indepen- of e-cigarettes. Thus, consumption of e-cigarettes dent non-profit organization to reduce the harm of may have been encouraged in states with strong to- tobacco to Minnesotans, a coordinated and com- bacco control, as well as states with weak tobacco prehensive state-wide tobacco control program has control, but through different mechanisms. Ad- conducted mass media campaigns,10 implemented ditionally, a study in 2012 found that e-cigarettes a telephone quit line,11 facilitated health systems were more widely available in states with weak to- change,12 supported communities disproportion- bacco control policies than states with strong poli- ally affected by tobacco,13 and actively pursued cies.6 Although the US market for e-cigarettes has local and statewide public policies (ie, a compre- continued to expand since 2012, markets that were hensive statewide smoking ban; increased tobacco targeted by the industry for early distribution of e- taxes in 2005 and 2013; local outdoor smoke-free cigarettes may remain disproportionately targeted laws) which have accounted for significant declines for advertising or still have greater e-cigarette avail- in statewide prevalence and consumption.14 ability. Taken together, these environmental dif- In addition, in 2010 Minnesota updated its defi- ferences that are highly correlated with the price nition of tobacco products to make e-cigarettes of cigarettes may have confounded Huang et al’s subject to Minnesota’s tobacco product tax and ability to measure the effect of cigarette price on other tobacco control measures, such as minimum e-cigarette consumption.5 age to purchase restrictions.15 The tax applies to Nonetheless, the premise that substitution of e- all non-cigarette tobacco products, at an amount cigarettes for combustible cigarettes is related to equal to 70% of the wholesale price, defined as the the price of combustible cigarettes has support in price at which a distributor purchases a tobacco the literature. Using a laboratory task, Grace, Kiv- product. Too few e-cigarettes were sold prior to ell, and Laugesen7 found a cross-price elasticity for 2010 to reliably estimate how the initial tax may e-cigarettes among New Zealand smokers of 0.16, have impacted sales. However, on July 1, 2013, suggesting that a 10% increase in the price of com- Minnesota subsequently increased its tax rates on bustible cigarettes would lead to a 1.6% increase both cigarettes and non-cigarette tobacco products in e-cigarette sales. That result is considerably less (including e-cigarettes). For e-cigarettes and other than the cross-price elasticity found for nicotine non-cigarette tobacco products, the tax increased gum found in a 2003 study (0.77);8 however, the from 70% to 95% of the wholesale price (nominal- authors of the e-cigarette study note that important ly a 14.7% increase in retail price). For cigarettes, differences in methods and setting warrant caution the tax per-pack increased by $1.73 to $3.32 per in comparisons.7 They also found that the avail- pack. The cigarette tax increase raised the average ability of e-cigarettes reduced stated intentions to price of a pack of cigarettes to $7.51 (30.2% in- quit following a hypothetical increase in the price crease in actual total price, observed in sales data), of combustible cigarettes. Further evidence for the and was followed by a 12% decline in the number relationship between cigarette price and interest of packs purchased at convenience stores over the in e-cigarettes is provided by Jo et al,9 who found next 6 months relative to the same months in the that US internet searches for e-cigarettes and other previous year (year-to-year change), compared to a non-cigarette tobacco products increased following 3% year-to-year decline during the 6 months im- a federal tobacco tax increase in 2009. mediately before the tax increase.16 Given the above evidence suggesting complex re- The environmental context of simultaneous ciga- lationships between other tobacco control policies rette and e-cigarette tax increases provides both and consumption of e-cigarettes, evaluating the ef- challenges and opportunities for studying the ef- fect of an e-cigarette price increase in Minnesota, fect of the e-cigarette tax increase. In a commen-

124 Amato & Boyle tary, Chaloupka, Sweanor, and Warner4 argue area. We obtained data for 2 market areas. The that e-cigarette taxes are likely to have the greatest Minneapolis, Minnesota, market area (4.5 million public health benefit when they are implemented people) was of primary interest for investigating the in concert with tax increases on combustible ciga- effect of the state tobacco tax increases. The Saint rettes. They suggest that mandating high prices Louis, Missouri, market area (3.4 million people) for e-cigarettes would be expected to discourage was selected as a comparison because: (1) both cit- dual-use and youth initiation; however, mandat- ies are located in the American Midwest; (2) St. ing relatively higher prices for cigarettes and other Louis and Minneapolis are approximately the same combustible tobacco products would encourage in population; and (3) St. Louis did not undergo smokers to try to quit those particularly dangerous any changes to tobacco control policies during the products, potentially by switching to e-cigarettes. study period. The fact that Minnesota’s e-cigarette tax increase was implemented simultaneously with a highly- Data Analysis publicized cigarette tax increase provides an oppor- The total numbers of all e-cigarette products sold tunity to evaluate the effect of the e-cigarette tax 4 in each time period were plotted for both cities in a context similar to the one Chaloupka et al and visually compared. In addition to investigat- considered optimal for the public health. However, ing changes across all products, we also investigated that same simultaneity prevents straightforward changes within the 2 highest selling brands which investigation of the effect of the e-cigarette tax in- together accounted for 88.8% of all units sold in crease on e-cigarette consumption. Minneapolis during 2013: NJOY (59.0%) and Sales of e-cigarettes may have been affected by Blu (29.9%). We further investigated the 2 high- the tax increases on both conventional cigarettes est selling products within each of these brands at and e-cigarettes, but in opposite directions. On the convenience stores, all 4 of which were disposable one hand, higher prices for e-cigarettes would be e-cigarettes. decrease expected to reduce demand, and sales of e- Our primary interest was comparing changes cigarettes. On the other hand, because quitting or over time in the shapes of the plots, rather than cutting down on cigarette smoking are consistently their absolute magnitudes. To facilitate that com- cited as the second and third most common rea- parison, we scaled the St. Louis data by multiplying sons for e-cigarette use among both national and the number of units (products packed for individ- Minnesota samples, preceded only by curiosity, it is ual retail sale) sold in each time period by a fixed possible that the higher price for combustible ciga- percentage value. The scale factor was calculated by increased 17,18 rettes may have sales of e-cigarettes. dividing the total number of units sold in Minne- We used sales data from convenience stores to in- apolis before the tax increase by the total number vestigate the net effect of these 2 opposing forces on of units sold in St. Louis during the same time. e-cigarette sales, following the simultaneous price Scale values were calculated separately for each increases on all tobacco products that occurred in plot, based on the subset of products included. To Minnesota on July 1, 2013. prevent differences in the timing of when products became available in the 2 markets from influencing METHODS results, data before the first time period for which Data Sources both markets had sales of those products greater Data on sales of e-cigarettes in convenience than a minimum threshold were excluded from the stores during 2012 and 2013 was obtained from calculation of scale factors. That threshold was set the Nielsen Company. The data included total at 1000 units for sets of multiple products (Figure numbers of units sold and average price for e-ciga- 1), and 500 units for individual products (Figure rette devices, cartridges, and liquid, separated into 2). 4-week time periods. The Nielsen Company main- For example, sales of all NJOY products did not tains representative panels of convenience stores in exceed 1000 units in each market until May, 2012. metropolitan areas, and sales from each store are Between May, 2012, and the implementation of weighted to achieve population estimates for the the tax increase, total sales of NJOY in Minneapo-

Tobacco Regulatory Science. 2016;2(2):123-132 DOI: http://dx.doi.org/10.18001/TRS.2.2.3 125 Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results

Figure 1 E-cigarette Units Sold Over Time in Minneapolis and Saint Louis Markets

lis (162,180 units) were 153% of sales in St. Louis sales exceeding the minimum threshold and ending (105,834 units). Thus, the number of units sold in with the time point immediately before the Min- St. Louis during each time period was multiplied nesota tax increase took effect, the mean and stan- by 1.53 when plotting and comparing sales of all dard deviation of those differences were calculated. NJOY products in the 2 markets. Third, a confidence interval of expected difference For each product and set of products investigat- between the 2 cities was created based on the vari- ed, changes in the number of units sold following ance of absolute differences before the tax increase. the tax increase were assessed as follows. First, the Any sales differences during time periods after the absolute difference between the number of units tax increase which exceeded the upper bound of sold in Minneapolis and the scaled number of units the confidence interval were considered significant. sold in St. Louis was calculated for each time point, To control type I error in the presence of multiple with the scaled St. Louis sales serving as an expect- comparisons, we set alpha at .01 and created 99% ed value for the Minneapolis sales. Second, starting confidence intervals. with the first time point for which both cities had In addition to testing whether the observed dif-

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Figure 2

Price and Units Sold of Selected E-cigarette Products: The 2 Most Popular Brands’ Most Popular Products

ference in sales between the 2 markets exceeded its (ie, “joinpoints” of line segments) necessary to fit expected difference, we used Joinpoint Regression the data.19 We used the Joinpoint tool made freely to compare the overall shape of sales in the 2 cities. available to researchers by the National Cancer In- Joinpoint Regression is a technique for modeling stitute,20 which has previously been used by others trends in data that uses Monte Carlo permutations to investigate trends in tobacco sales.21 Joinpoint to find the minimum number of change points Regression is well suited for trend analysis of this

Tobacco Regulatory Science. 2016;2(2):123-132 DOI: http://dx.doi.org/10.18001/TRS.2.2.3 127 Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results

Table 1 Comparison of E-cigarette Trends in Total Number of Units Sold, Minneapolis vs Saint Louis All Products NJOY Blu 5/19/2012 5/19/2012 11/3/2012 First time period with sales > 500 units (N = 14) (N = 14) (N = 8) % of total units sold in Minneapolis during 2013 a 100% 58.98% 29.86% 1832 4081 791 Mean absolute difference b before tax increase (SD = 1586) (SD = 2307) (SD = 534) Upper bound of 99% CI for mean absolute [2923] [5669] [1277] difference b before tax increase Difference b during 4 weeks ending on: 7/13/2013 7397 (+36%)* -5184 (-27%) 4810 (+98%)* 8/10/2013 4211 (+22%)* -6312 (-37%)* 4177 (+88%)* 9/7/2013 -1002 (-6%) -8716 (-57%)* 1901 (+37%)* 10/5/2013 -3676 (-22%)* -8139 (-65%)* 1532 (+31%)* 11/2/2013 -6477 (-40%)* -7754 (-67%)* -110 (-3%) 11/30/2013 -6383 (-35%)* -6725 (-64%)* 365 (+8%) 12/28/2013 -5798 (-33%)* -5994 (-67%)* 909 (+20%) * Denotes a post-tax difference significantly larger in absolute value than the mean absolute difference before the tax increase.

Note. a Percentage of all e-cigarettes, cartridges, and related accessories sold. Across all brands and all products. b Differences calculated as raw Minneapolis values minus expected values. Expected values calculated as scaled St. Louis values, as described in Methods section. The differences as percentages of the expected values are shown in parentheses. data because: (1) the technique does not require for both markets were generally similar before the standard errors to be known for each time point, Minneapolis price increase. Sales in both markets which are not available in Nielsen data; and (2) the were characterized by a plateau through the middle technique uses a data driven approach to discover of 2012, an increase at the end of 2012, and local best-fit change points, which allows us to model peaks in March of 2013. Total sales in the 2 time environmental changes affecting e-cigarette sales periods immediately following the July 1, 2013 tax without needing to a priori know the identity of increase were significantly greater than expected in those environmental changes. We tested whether Minneapolis, based on the average variability be- sales in each market were best modeled by fit lines tween sales in the 2 markets before the tax increase containing 0 to 5 change points. (Table 1). Total sales in the final 4 time periods were Finally, price changes for the 4 specific products significantly lower in Minneapolis than would be investigated were calculated as the difference be- expected. tween the mean price for time points before the Sales of NJOY and Blu products are presented in tax increase and the mean price for time points af- the bottom panels of Figure 1 and summarized in ter it. Prices were adjusted for inflation using the the rightmost columns of Table 1. Sales of NJOY Consumer Price Index published by the Bureau of products in Minneapolis were numerically below Labor Statistics, converting all to December 2013 their expected value in the time period immediately dollars. following the tax increase, and significantly below their expected values in all subsequent time peri- RESULTS ods. In contrast with NJOY products, sales of Blu Total sales of all e-cigarette products are presented products in Minneapolis were significantly greater in the top panel of Figure 1. The shapes of the curves than expected in the 4 time periods immediately

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Table 2 Comparison of E-cigarette Trends in Units Sold of 4 Selected Products, Minneapolis vs Saint Louis NJOY NJOY Blu Blu disposable disposable disposable disposable tobacco flavor menthol flavor tobacco flavor menthol flavor 4.5% nicotine 3.0% nicotine 2.4% nicotine 2.4% nicotine 12/1/2012 12/1/2012 1/26/2013 1/26/2013 First time period with sales > 500 units (N = 7) (N = 7) (N = 5) (N = 5) % of total units sold in Minneapolis during 2013 a 24.36% 15.80% 15.41% 7.77% 1693 1295 581 370 Mean absolute difference b before tax increase (SD = 1911) (SD = 663) (SD = 573) (SD = 184) Upper bound of 99% CI for mean absolute [3553] [1940] [1241] [582] difference b before tax increase Difference b during 4 weeks ending on: 7/13/2013 -2510 (-30%) -486 (-15%) 2795 (+109%)* 1450 (+99%)* 8/10/2013 -1676 (-27%) -1415 (-33%) 1805 (+81%)* 1148 (+87%)* 9/7/2013 -4261 (-56%)* -1333 (-46%) 110 (+4%) 773 (+59%)* 10/5/2013 -4628 (-73%)* -654 (-33%) 713 (+29%) 318 (+27%) 11/2/2013 -3778 (-70%)* -889 (-42%) 277 (+13%) -488 (-47%) 11/30/2013 -3462 (-69%) -1447 (-57%) 493 (+19%) -303 (-27%) 12/28/2013 -2688 (-72%) -1378 (-62%) 789 (+31%) -340 (-30%) * Denotes a post-tax difference significantly larger in absolute value than the mean pre-tax difference.

Note. a Percentage of all e-cigarettes, cartridges, and related accessories sold. Across all brands and all products. b Differences calculated as raw Minneapolis values minus expected values. Expected values calculated as scaled St. Louis values, as described in Methods section. The differences as percentages of the expected values are shown in parentheses. following the tax increase. Sales of Blu products $10.62 to $12.81. As with the non-menthol prod- were within the 99% confidence interval of expect- uct, sales at all time points following the tax in- ed values throughout the remaining periods. crease were below expected values; however, none Figure 2 and Table 2 present data for the 2 NJOY of the differences were individually significant. and 2 Blu products with the largest unit sales in The highest selling Blu product in Minneapolis 2013. All 4 products were single, disposable e- during 2013 was a tobacco flavored e-cigarette la- cigarettes. The highest selling NJOY product in beled as containing 2.4% nicotine (15.4% market Minneapolis during 2013 was a tobacco flavored share). Its average price increased from $11.16 to e-cigarette labeled as containing 4.5% nicotine $13.90 (24.6%). The second highest selling Blu (24.4% market share). Its average inflation-adjust- product was a menthol flavored e-cigarette labeled ed price before the tax increase was $10.72 and as containing 2.4% nicotine (7.7% market share), its average price after the tax increase was $12.75 which cost $11.74 before the tax increase and (18.9% higher). The number of units sold in the $14.28 after it (21.6% increase). Sales of both Blu 2 periods immediately after the tax increase were products were significantly greater in Minneapolis within expected values; sales were significantly be- than expected in the 2 time periods immediately low expected values in the subsequent 3 periods. following the tax increase; sales of the menthol The second most popular NJOY product was a product were also significantly greater than expect- menthol-flavored e-cigarette labeled as containing ed in the third time period after the tax increase. 3.0% nicotine (15.8% market share). Its average Sales of both products in subsequent time periods price increased 20.6% after the tax increase, from were within the expected confidence interval.

Tobacco Regulatory Science. 2016;2(2):123-132 DOI: http://dx.doi.org/10.18001/TRS.2.2.3 129 Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results

Figure 3 Joinpoint Regression Trend Lines for E-cigarette Sales in Minneapolis and Saint Louis Markets, and Year-to-Year Change in Minneapolis Cigarette Sales

Note. Trend lines obtained from best-fit models of Joinpoint Regression analysis. Year-to-year change in Minneapolis cigarette sales reproduced from Amato, Boyle, and Brock.16

Best fit models from the Joinpoint Regression after the tax increase, sales of e-cigarettes peaked are presented in Figure 3, along with year-to-year while sales of combustible cigarettes declined. Sub- change in cigarette sales in the Minneapolis mar- sequently, sales of e-cigarettes declined while sales ket. The trend of e-cigarette sales in the St. Louis of combustible cigarettes rebounded. market was best modeled by a fit line containing 2 change points. In contrast, sales in the Minneapolis DISCUSSION market were modeled significantly better by a fit We found evidence that in Minneapolis conve- line that contained 5 change points (compared to nience stores, total sales of e-cigarettes initially in- a fit line containing 0,1,2,3, or 4; p < .05 for all). creased to 36% above expected values immediately Two of the additional change points in the Min- after simultaneous tax increases on cigarettes and neapolis trend, which were not present in the St. e-cigarettes took effect. Total sales then steadily Louis trend, occurred immediately before and im- declined, reaching a nadir of 40% below expected mediately after the tax increase, reflecting the spike values approximately 4 months later. in e-cigarette sales and subsequent decrease. The third change point in the Minneapolis trend which We also found evidence that the prices of all 4 was not present in the St. Louis trend occurred 4 products we investigated increased by more than time periods after the tax increase and represented the amount of the tax increase (18.9% to 24.6%, the point at which sales leveled off. As can be ob- vs a nominal increase of 14.7% from the tax). The served by comparing the shape of e-cigarette sales has a long history of over-shifting in Figure 3 (main plot) with the shape of combus- prices following tax increases, using the tax change as an opportunity to increase profits while blaming tible cigarette sales (top panel), the 2 products ap- 22,23 pear to have had an inverse trajectory. Immediately government. Our results suggest this practice is alive and well among e-cigarette companies.

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Brand analysis revealed that overall sales increases the tax increase likely reduced baseline demand were attributable to gains by Blu, then the only among those using e-cigarettes before the tax in- widely available e-cigarette brand owned by a major crease. Consumers also may have changed the lo- tobacco company. In consideration of our previous cations where they purchased their e-cigarettes; analysis demonstrating that consumption of ciga- some individuals may have started purchasing e- rettes decreased following the tax increase,16 one cigarettes at convenience stores, but then switched interpretation of the immediate spike in e-cigarette to a local , the Internet, tribal locations, sales is that many cigarette smokers were switch- another state, or some other source. ing entirely or partially to e-cigarettes in the The lack of data about consumption in vape that they would help them quit or cut down their shops, through Internet sales, or by cross-border smoking. The Lorillard Tobacco company, then- purchases limits the conclusions that can be drawn owner of both Blu e-cigarettes and many popular from this study, and should be addressed in future cigarette brands, may have used price promotions, research. A better understanding of the propor- direct mail to smokers, or other marketing tech- tion of e-cigarette users who buy their products at niques to encourage such substitution. Although convenience stores would help, as would primary we do not have data on whether that occurred, pre- data on consumption over time from other sources. vious studies have found that tobacco companies From available data, it is impossible to know the engage in robust direct marketing efforts in the extent to which the observed decreases in e-ciga- Minneapolis area.24 rette sales after the initial surge were due to relapse In contrast, the overall sales decreases were at- to smoking, decreased consumption among prior tributable to losses by NJOY. For reasons that are e-cigarette users, or from consumers switching to unknown, sales of NJOY products in Minneapo- purchase e-cigarettes from other venues. Addition- lis convenience stores began diverging from sales ally, the sales data analyzed here provide informa- in St. Louis several months before the tax increase tion about consumption only; these data do not went into effect, decreasing in Minneapolis more provide information about prevalence, nor the rapidly than in St. Louis. intentions and behaviors of the individuals who Several potential, non-exclusive interpretations purchased e-cigarettes. Furthermore, the effects of exist for the subsequent decline in e-cigarette sales. a tax increase on consumption of the types of e-cig- Some smokers who responded to the cigarette tax arettes sold in convenience stores, typically “closed increase by purchasing e-cigarettes as substitutes systems” that are disposable or require proprietary for cigarettes or as smoking cessation aids may have cartridges, may be qualitatively different from the abandoned the effort and returned to smoking. effects of an equivalent tax increase on consump- This explanation is supported by the fact that most tion of the “open system” devices that are com- e-cigarette users discontinue use,17 and also the ob- monly available in vape shops and on the Internet. servation that the decline in e-cigarette sales fol- lowing their spike was coincident with a rebound IMPLICATIONS FOR TOBACCO in combustible cigarette sales (Figure 3). REGULATION When comparing the trends of cigarette and e- This study is the first to use real world data to mea- cigarette sales, it is important to keep in mind the sure the effect of an e-cigarette excise tax on sales. fact that nearly all e-cigarette users are current or The rapidly evolving e-cigarette market, as well as former smokers,25 but proportionally few current their perception by smokers as a cessation aid, pres- or former smokers are e-cigarette users.18 Conse- ent challenges to studying the impact of price in- quently, one would expect changes in the trend of creases that have not historically been present for cigarette sales to have an effect on e-cigarette sales, studies of cigarette price elasticity. Clear differential but not necessarily vice versa. In 2013 there were effects by brand suggest the influence of additional about 10 million packs of cigarettes sold in Min- factors, potentially including tobacco industry ad- neapolis market convenience stores, compared to vertising. Additional research is needed to establish less than 250,000 e-cigarettes. more precise effect size estimates for the impact of At the same time, higher e-cigarette prices after tax increases on the sale of e-cigarettes. Qualitative-

Tobacco Regulatory Science. 2016;2(2):123-132 DOI: http://dx.doi.org/10.18001/TRS.2.2.3 131 Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results ly however, the data analyzed in this study provide opportunity: increasing use of cessation services following real world, proof-of-concept evidence that simulta- a tobacco tax increase. BMC Public Health. 2015;15:354. 12. Jansen AL, Capesius TR, Lachter R, et al. Facilitators of neous price increases on cigarettes and e-cigarettes health systems change for tobacco dependence treatment: are associated with a short term spike in e-cigarette a qualitative study of stakeholders’ perceptions. BMC consumption at convenience stores, followed by a Health Serv Res. 2014;14(1):1-10. larger reduction. 13. Ericson R, St Claire A, Schillo B, et al. Developing lead- ers in priority populations to address tobacco disparities: results from a leadership institute. 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