Preventive Medicine Reports (Sep 2017)

Effect of brand and advertising medium on demand for e-cigarettes: Evidence from an experimental auction

  • Matthew C. Rousu,
  • Richard O'Connor,
  • Jay Corrigan

DOI
https://doi.org/10.1016/j.pmedr.2017.04.013
Journal volume & issue
Vol. 7, no. C
pp. 11 – 15

Abstract

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Print and television advertisements for e-cigarettes are currently legal in the United States. Given that e-cigarettes are a lower-risk alternative to cigarettes, these ads could have a positive public health impact if they motivate smokers to switch to e-cigarettes. However, the public health impact of e-cigarette ads could be negative if ads increase demand for both e-cigarettes and cigarettes. We use experimental auctions –in which participants bid in real auctions and winners pay for the items they purchase – to study the effect of print and TV e-cigarettes ads on demand for the brand from the ad, for another e-cigarettes brand, and for cigarettes. We ran experiments with 288 Pennsylvania smokers in November 2014–March 2015 and we found that in cases where an ad affects demand for e-cigarettes, the ad moves demand for cigarettes in the same direction. For example, the Blu print ad increases demand for Blu e-cigarettes and cigarettes among non-white participants. The Vuse TV ad reduces demand for both types of e-cigarettes and for cigarettes. We also find that non-white participants are willing to pay more for e-cigarettes in the absence of advertising, and that smokers who worry most about their health are willing to pay more for e-cigarettes. The results of this study point to the need for greater scrutiny of advertising for e-cigarette products such that they do not also induce demand for tobacco cigarettes.

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