Estimating the Price Elasticity of Demand for JUUL E-cigarettes among Teens

Abstract Background The widespread popularity of e-cigarettes, particularly JUUL, has led to an alarming increase in teen nicotine use, reversing a 40-year trend. One key question is how sensitive teens’ demand for JUUL is to changes in price. Methods We estimate the price elasticity of demand using results from an experimental auction where teen nicotine users and nonusers bid on a JUUL kit. Results We find that a 10% increase in price leads to as much as a 24% reduction in JUUL demand among teens using nicotine, and as much as a 45% reduction among teens not currently using nicotine. The teens in our study were more price sensitive than older adults who took part in a similar earlier study. Conclusions From a public health standpoint, these are promising results. High e-cigarette taxes may dissuade relatively few older adult cigarette smokers from switching to e-cigarettes, but at the same time be highly effective at preventing teens from becoming e-cigarette users in the first place.