#studentviews: How can UK policy-makers stop young people from vaping?

The UK proposes to introduce an excise duty on e-cigarettes, with the primary goal being to reduce their consumption. The policy’s effectiveness will depend on whether the price increase is enough to deter people from buying these products – and whether an overall smoking ban is implemented.

An excise duty on e-cigarettes is likely to be introduced to reduce vaping, particularly among under-18s. If a price goes up (via a duty or otherwise), consumption will go down – in theory at least – and due to their typical lack of disposable income, teenagers are more ‘price-sensitive’ than other age groups.

Despite this, the effect of the proposed duty on young people’s health outcomes may not be as simple as the government anticipates. For example, there may be significant variation in the response of under-18s to the new duty on vapes, which is proposed for October 2026.

According to data from a ‘Monitoring the Future’ survey of American teenagers, younger, non-white men are less likely than their counterparts who are white women to perceive an increase in the health risks associated with e-cigarettes in response to a rise in excise duties placed on these products.

How under-18s source their e-cigarettes is also likely to change in response to the change in policy. A price rise of retail e-cigarettes may encourage under-18s to resort to online substitutes. Such products tend to be less well regulated and they contain more additives and carcinogens than regulated e-cigarettes. By pushing young consumers towards riskier online options, the excise duty could have an unwanted effect in terms of health.

Similarly, the e-cigarette tax could also result in individuals choosing to buy traditional combustible cigarettes instead, an effect that survey evidence suggests is more pronounced among older, white teenagers. Given the long-run policy effort to reduce tobacco smoking in the UK, this would be another unwanted outcome of the new duty.

But this could be countered by proposed legislation, which has been supported by MPs, to ban anyone born after 2009 from buying cigarettes (BBC, 2024).

What are the aims of the excise duty?

The aim of the excise duty is to reduce vaping by increasing the cost of e-cigarettes. The duty increases in value alongside the concentration of nicotine e-liquid being sold. According to government consultation papers, this should encourage consumers, and to a lesser extent producers, to substitute to lower nicotine/nicotine-free e-cigarettes, consistent with the aim of eliminating smoking by 2030.

By artificially inflating the cost of products with greater concentrations of nicotine, UK policy-makers are hoping to shift consumer behaviour towards relatively healthier options.

Figure 1: Different frequencies of e-cigarette usage among under-18s, 2013-2023

Source: Action on Smoking and Health (ASH), Smokefree GB Youth Survey

Research shows that e-cigarette taxes reduce consumption of vapes among under-18s (Abouk et al, 2023). But the effect is not that large. By standardising different county/state tax regimes on e-cigarette consumption, the authors of this study estimate that a 1% rise in the e-cigarette price reduces consumption by only 0.43%. This represents an extremely ‘price-insensitive’ demand for e-cigarettes: raising the price (via the duty) has only a minimal effect on consumption.

A consequence of price-insensitive demand is that the duty will be passed onto consumers via higher prices. This is because the firms selling the vapes know that their target buyers will accept the increase in price. There is no need to absorb the cost (which would eat into the firm’s profits).

Indeed, research shows that in the United States, up to 90% of e-cigarette taxes are passed onto consumers (Cotti et al, 2022). So, it is likely that the excise duty in the UK, formally levied on the producers/distributors of e-cigarettes, will raise the price of e-cigarettes without curbing much of the demand. This is especially concerning as the aim of the duty is not to raise revenue but to reduce smoking.

That being said, under-18s typically have less access to disposable income than adults. This means that any price increase (via taxes/duties) could have a greater effect on their spending decisions. In this sense, young people are more price-sensitive than older people. So, the excise duty could led to greater declines in vaping , as policy-makers intend.

The progressive nature of the excise duty may also influence vape consumption among young people. As noted, the size of the duty rises as the concentration of nicotine in e-liquids increases. So, under-18s may choose to consume lower-nicotine/nicotine-free e-cigarettes as a result.

This potential effect will depend on the strength of teenagers’ preferences for nicotine. Strong preferences, which are likely given its highly addictive nature, may mean that they will continue to buy higher-nicotine e-cigarettes despite the elevated cost. Whether the increase in cost pushes young people towards lower-nicotine options or if teenagers simply accept the increase in the cost of high-nicotine vapes to satisfy their addiction remains to be seen.

Will traditional cigarettes substitute for vapes?

Making vapes more expensive could push teenagers back towards smoking traditional cigarettes – although this will depend on whether the new smoking ban proposals become law.

Research shows that cigarettes and e-cigarettes are economic substitutes: a 1% rise in e-cigarette taxes raises combustible cigarette consumption by 5.3% (Pesko et al, 2020).

This raises serious concerns that the proposed excise duty will provide incentives for higher consumption of traditional cigarettes, thus having detrimental net effects on the health of under-18s. This is especially worrying as medical research shows that e-cigarettes are significantly less harmful than cigarettes (Centers for Disease Control and Prevention (CDC), 2024).

Figure 2: Percentage of 11-17 year-olds who use e-cigarettes versus traditional cigarettes

Source: ASH Smokefree GB Youth Survey

Several factors may affect whether people move towards smoking cigarettes as a result of the new tax .

First, as mentioned above, if the smoking ban comes into force, individuals born after 2009 will be unable to buy cigarettes. The new law will work by increasing the legal age to buy cigarettes – currently age 18 – each year by a year, thus leading to a full ban (BBC, 2024).

Second, vapes and cigarettes have different nicotine concentrations. Currently, a pack of 20 Benson and Hedges cigarettes in the UK contains 24mg of nicotine whereas, for as little as 30% of that price, 2ml e-cigarettes contain up to 40mg of nicotine. If we assume that consumers are smoking for the nicotine content (or ‘gain utility’ – what economists say when they mean ‘enjoy’ – from this), then e-cigarettes provide a far higher concentration for a considerably lower price.

Third, the government will simultaneously increase the tobacco excise duty by £2 per 100 cigarettes to maintain the relative price of traditional cigarettes compared with e-cigarettes. This policy design is likely to mute the effect of increased cigarette consumption as a response to the e-cigarette excise duty.

Fourth, the studies mentioned above look at the relationship between e-cigarettes and cigarettes as economic substitutes in adults and not under-18s (Pesko et al, 2020). This may seem like a minor change, but increased health awareness surrounding the dangers of cigarettes in younger generations may mean that under-18s are not as willing to swap e-cigarettes for cigarettes, although this is no certainty.

Finally, the effect of the excise duty on consumption may be harder to estimate because nicotine is a highly addictive substance. The evidence above investigates the effect of e-cigarette taxes in the United States by comparing areas where there has been an e-cigarette tax for a long time with areas where such taxes have been implemented more recently. These studies aim to estimate the effect on e-cigarette consumption from this comparison.

But the effect of e-cigarettes taxes on their consumption could vary over time. As nicotine is a highly addictive substance, it is likely to take time for consumers to change their behaviour, as their consumption may be more of a pattern/routine than a binary decision of what to spend money on. This casts further uncertainly on the short- and long-term effects of the new excise duty on the use of vapes among young people.

How will e-cigarettes be sourced following the introduction of the duty?

How e-cigarettes are sourced by under-18s could also be affected by the excise duty. As mentioned, a price increase will be likely to hit price-sensitive, lower-income under-18s harder.

Further, increased prices could have an indirect effect on under-18s who rely on older peers to purchase e-cigarettes on their behalf. Either their peers would charge under-18s more for buying e-cigarettes for them, or they may be met with increasing reluctance to share e-cigarettes for free.

While this may seem positive at first glance, the price pressures on under-18s may end up increasing third-party procurement of e-cigarettes through social connections and non-retail outlets. This avenue lies beyond legal regulation and consequently a rise in third-party e-cigarette procurement by under-18s could increase exposure to harmful chemicals for younger people overall.

Conclusion

The net effect of the duty on e-cigarette consumption (and therefore smoking-related health outcomes) for under-18s depends ultimately on how price-sensitive their demand is for e-cigarettes.

Given the addictive nature of nicotine, the price rises implemented by the duty may still be insufficient to curb e-cigarette consumption significantly. Further, teenagers may swap e-cigarettes for traditional cigarettes or source e-cigarettes from non-retail locations.

Such outcomes would damage individual and net public health. But there is still uncertainty about the magnitude of these effects. Overall, the government should review e-cigarette and cigarette consumption patterns across the population and amend the value of the excise tax appropriately to achieve the desired effect.