Hedonic Pricing of Attributes of Nicotine Delivery Systems and the Impact of Bans on Specific Attributes
thesisposted on 01.08.2019, 00:00 authored by Nahleen Zahra
This dissertation uses novel techniques to identify areas of effective vaping and tobacco control policy and evaluates the impact of existing policies on sales using retail scanner data. The first chapter uses a hedonic pricing method to estimate exact dollar values for the economic valuation of flavour and strength levels of electronic (e-) cigarettes. New and casual users who buy disposable and starter kits of rechargeable e-cigarettes value exotic flavours such as fruit, candy or spices the most, paying a price premium for these over tobacco and menthol flavours, with menthol being the least favoured. They also pay a similar premium for low-strength products compared to full-strength. However, more regular users who buy refill cartridges tend to value both exotic and menthol flavours more highly than tobacco, as well as full-strength. In the second chapter, the same methodology is used to estimate dollar values for the valuation of attributes of conventional cigarettes and little cigars. Smokers pay a price premium for menthol flavour in cigarettes and for low-strength options. They pay less for long and for filter-tipped cigarettes, but pay a premium for the option to buy individual packs rather than in bulk. I also find that smokers of little cigars tend to have varying preferences depending on what kind of store they purchase from. While smokers who buy from convenience stores value tobacco flavour and non-filter tips more, those who buy from food, drug and mass stores have the opposite preferences, suggesting a difference in consumer profile in the two store types. The final chapter examines the short- and long-term impacts of two policies that target specific attributes of cigarettes and little cigars. I find that the ban on sales of flavoured cigarettes had the short-term effect of increasing sales of menthol cigarettes, but the effect did not persist over time. The ban on descriptor words on cigarette packaging had the short-term effect of increasing sales of low- and full-strength cigarettes, and dampened sales of both in the long-term, slowing sales of full-strength cigarettes and causing that of low-strength ones to decline over time.