My new paper: Understanding the basic economics of tobacco harm reduction

by Carl V Phillips

In case you missed it, my new IEA paper, Understanding the basic economics of tobacco harm reduction, is available here. You should go read it. The summaries do not do it justice. (Not really joking there — the summaries have picked up on one particular conclusion, but the value of the paper is laying out how to think about the whole issue.) I am posting this here primarily to create an opportunity for comments, since that is not available at the original.

Speaking of summaries, you can find this one at CityAM, which was kind enough to also run my op-ed that was based on the paper. (Needless to say, I did not choose the headline nor the link in the first paragraph — can you imagine me citing the RCP report as if they were the source of that information???)

7 responses to “My new paper: Understanding the basic economics of tobacco harm reduction

  1. Hi Carl,

    some remarks on this part of your text:
    ” The availability of low-risk tobacco/nicotine products will inevitably increase total consumption as compared to a world where cigarettes are the only option. This is the inevitable and rational effect of lowering the costs of a consumption choice. It is properly counted as an additional benefit, though it is widely derided as a cost. Public supporters of low-risk products who condition their support on those products not attracting any new users are either being naïve or cynically imposing conditions they know cannot be met.”

    Let´s suppose that only 3 % of all vapers are former non-smokers. This figure is negligible.
    The numbers of smokers are falling (in developed countries at least). Then, if the numbers of smokers decrease and vapers consist out of 97 % former smokers, then the numbers of smokers and vapers will decrease in the long run.
    Therefore I don´t expect an “inevitable increase of total consumption”.
    An increase would necessarily need a high number of non-smokers becoming vapers.

    • Carl V Phillips

      The increase refers to the level that would exist in the absence of the condition (in this case, the widespread availability and social popularity of e-cigarettes). It might be that there are secular trends in smoking that would not be made up for by the expanding use of low-risk alternatives. Or there could be some shock that would cause a radical change in both. But in any case, some more people will be using tobacco products given that some of them are known to be lower risk, as opposed to the same world except with only cigarettes available.

      Having only 3% of vapers who were nonsmokers when they started vaping is lower than it actually is now and much lower than it will be. It seems likely that in 20 years, assuming e-cigarettes do not become passe before then (which is very possible), far more than have of vapers will not have been people who quit smoking with vaping. Many will be would-be smokers who always vaped instead, but many will be would-be never smokers. That is a rough seat-of-the-pants estimate, of course, not based on any of the math in the paper.

  2. Good reaction Carl, I’d only add this Hans: what the article argues is that *even tough* a low risk alternative will have a nett increase of people that use nicotine, the total benefit in health for the population because of the enormous decrease in smokers is huge.

    I personally like to compare it with condoms – sure abstinence is best and sure-fire way to prevent STD’s & unwanted pregnancies… but we already know people are going to do it. So any system or alternative in place that minimizes risk is a welcome one and should be promoted.

  3. Hi Carl, an extremely interesting read. I hope you find our discussion of it at ECigIntelligence a little more rounded than some of the tax-preoccupied coverage!

    • Carl V Phillips


      Since your page does not allow comments, I will respond here.

      1. Nice job summarizing my points. I don’t disagree with any of that. That is very rare.

      2. I am no longer affiliated with CASAA (and was not at the time this paper was published). That should probably be corrected.

      3. I would disagree that my statement “a de facto near-ban moving forward in the USA” is in any way “rhetoric”, as you characterize it. Also I am curious how you can disagree with the substance of the statement.

      4. “Some will consider, too, that his thesis places insufficient weight on the impact of secondhand smoke.” I note the aesthetic externalities from smoking and identify them as potentially important. If you are talking about health effects, I think you will find that the typical discussion considers it far more important than the science supports.

      5. When assessing what will happen, keep in mind that predictions only a decade out have generally been badly wrong. This argues for paying attention to what the long-run natural equilibrium appears to be (despite the “we are all dead” caveat) rather than trying to extrapolate a couple of years of disequilibrium data.

      • Hi Carl, thanks for getting back to me. I’ve corrected the reference to CASAA – my apologies, I didn’t realise you were no longer in that role.

        On your other points, with brevity in haste:

        3. We believe that when the PMTA process begins in earnest, the FDA will not set the bar as high for all e-cigarette products as it might be strictly entitled to. We certainly believe the number of products on the market will shrink, and innovation will be hindered, but we’re less convinced than some in the industry that either the shrinkage or the hindrance will be fatal. (Note, this is leaving completely aside any potential judicial rulings on the deeming regs, and assuming the status quo continues to obtain.)

        4. Oh, I appreciate your point entirely – hence the “some will consider…” – I imagine that this “omission” in your thesis is one of the most likely points to be seized on by those who don’t want to agree with it (perhaps motivated by other reasons).

        5. Quite. Apart from anything else, there are just too many variables. And I think it would be very foolish to assume that the vapour (or for that matter broader THR) products of today will bear much resemblance to those of five years hence, let alone ten.

        Best regards


        • Carl V Phillips

          Thanks for the reply.

          2. Thanks for the correction.

          3. We differ in part in our predictions (I too was referring to the rule as written). I am not entirely convinced that even what you describe would not fit what I would call a near-ban.

          4. Got it.

          5. Yes, among other things (e.g., social norms blow with the wind). Predictions about specific techs are especially silly. Who predicted how popular ADD medicine (which is basically what meth is) would be so popular compared to cocaine a few decades ago? I LOL at those pundits who make pronouncements about ecigs (specifically) replacing X% of smoking over 20 years.

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