Unintended Consequences: Cigarette Regulations

by Levi A. Russell

One of the biggest challenges with regulation is avoiding unintended consequences. Regulators are human and are thus limited in their ability to determine all the effects of the regulations they impose on the public. While some regulations are likely necessary, we should be careful about calling for additional regulations, especially in cases where it is difficult to forecast their effects.

E-cigarettes, a relatively new product that is currently very lightly regulated, are a good example of a case where extreme caution is advised when determining new regulations. The FDA is considering regulations on e-cigarettes because they are concerned that e-cigarette companies are marketing their products to teens. E-cigarettes have been shown to function as a "gateway drug" for regular cigarettes. However, as a recent Forbes column points out, these products are also very useful in helping adults quit smoking.

The FDA must balance the costs of e-cigarettes (teens using them and moving to cigarette smoking) with the benefits (helping adults quit smoking). As the Forbes column points out, about 1.5 million smokers use e-cigarettes to quit each year. On the other hand, about 0.5 million teens start smoking each year due to e-cigarette usage. So, the raw math indicates that restricting e-cigarette usage will mean that more people in general are smoking each year because the 1.5 million who quit with the help of e-cigarettes will find it harder without them.

Time will tell whether the FDA decides to restrict e-cigarette usage. Does it make sense to keep people from using e-cigarettes to quit smoking just to prevent a relatively small group of teens from starting? Surely this is a difficult ethical issue, but keeping an eye out for unintended consequences like this is a necessary part of the regulatory process.

Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University