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. 2025 Aug:102:103022.
doi: 10.1016/j.jhealeco.2025.103022. Epub 2025 Jun 9.

The Effect of E-Cigarette Taxes on Substance Use

Dhaval Dave  1 , Yang Liang  2 , Johanna Catherine Maclean  3 , Caterina Muratori  4 , Joseph J Sabia  5
Affiliations

The Effect of E-Cigarette Taxes on Substance Use

Dhaval Dave et al. J Health Econ. 2025 Aug.

Abstract

Public health advocates warn that the rapid growth of legal markets for electronic nicotine delivery systems (ENDS) may generate a "gateway" to marijuana and harder drug consumption, particularly among teenagers. This study explores the effects of ENDS taxes on substance use. Analyses are based on difference-in-differences and event-study methods applied to both survey (Youth Risk Behavior Surveillance System and Behavioral Risk Factor Surveillance System) and administrative (Treatment Episode Data Set) data. Our results imply that a one-dollar increase in ENDS taxes (2023$) is associated with a 1.0 to 1.5 percentage point decline in teen marijuana use and in co-use of ENDS and marijuana. This result is consistent with e-cigarettes and marijuana being economic complements. We also find that youth responses to ENDS taxes, in terms of their ENDS use and spillovers into marijuana use, appear to moderate over the longer term. We find no evidence that ENDS taxes affect drug treatment admissions or consumption of illicit drugs other than marijuana such as cocaine, methamphetamine, or opioids.

Keywords: E-cigarette use; ENDS taxation; Teen marijuana use; Vaping.

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Conflict of interest statement

Declaration of competing interest Declaration of Competing Interests Dr. Sabia acknowledges research support for this work from the Center for Health Economics & Policy Studies (CHEPS) at San Diego State University (SDSU), which has received grants from the Charles Koch Foundation and the James Hervey Johnson Charitable Educational Trust. This study was funded with a grant from Global Action to End Smoking (formerly known as the Foundation for a SmokeFree World), an independent, U.S. nonprofit 501(c)(3) grantmaking organization. Global Action played no role in designing, implementing, data analysis, or interpretation of the study results, nor did Global Action edit or approve any presentations or publications from the study. The contents, selection, and presentation of facts, as well as any opinions expressed, are the sole responsibility of the authors and should not be regarded as reflecting the positions of Global Action to End Smoking. The views expressed herein are those of the authors. All errors are the authors’. The authors have no competing interests to declare.

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