As global citizens shift from smoking to vaping, the economic implications of this emerging market are under the microscope. The cost of smoking vs. vaping, which was once the question on everyone’s lips, has taken a backseat amid concerns about market dynamics, trends, and anti-vape legislation.
Cost of Vaping vs. Smoking in the U.S.
The price per pack of 20 Marlboro Red cigarettes varies from state to state, with New Yorkers paying $17 and people in Austin paying just $81“America: Prices by City of Cigarettes 20 Pack (Marlboro) (Markets),” www.numbeo.com. https://www.numbeo.com/cost-of-living/region_prices_by_city?itemId=17®ion=019. Marlboro Red cigarettes contain 1.2mg of nicotine each, or 24mg of nicotine per pack. A typical smoker gets 10 puffs per cigarette, which equates to 200 puffs overall.
For the same hit, we recommend finding an e-liquid that contains 20mg of nicotine. Elf Bar disposables range from $5 to $20. Americans can purchase the Elf Bar BC5000 disposable with 50mg of nicotine for just $11.99.
Cigarettes can’t compete with the cost of disposables. Of course, the comparison becomes more nuanced when we move away from popular disposables and instead look at rechargeable and refillable vape devices. However, considering that disposables are by far the most popular type of vape device, it is safe to assume that most people are saving money by choosing to vape.
Vaping Rules and Regulations in the U.S.
On a Federal level, lawmakers have made massive strides to restrict (and even outright ban) e-cigarette products in the last 10 years.
Here are the most important Federal decisions about e-cigarettes.
- 2014. The World Health Organization (WHO) decided that e-cigarette products fall under the umbrella of tobacco, exposing them to a whole new world of regulations and laws.
- 2016. The Food and Drug Administration (FDA) gained the power to regulate e-cigarettes.
- August 2016. The WHO recommended that e-cigarettes be banned in indoor areas where smoking is prohibited.
- December 2019. A Federal law raised the Federal minimum legal sales age for all tobacco products, including e-cigarettes, from 18 to 21.
- January 2020. The FDA announced it would start reviewing Premarket Tobacco Product Applications (PMTAs) and not authorize e-liquid flavors unless the manufacturer provides evidence that the products are not a detriment to human health. During this year, the FDA also banned e-cigarette products that appeal to kids, including fruit and mint flavors2FDA, “FDA finalizes enforcement policy on unauthorized flavored cartridge-based e-cigarettes that appeal to children, including fruit and mint,” U.S. Food and Drug Administration, Jan. 02, 2020. https://www.fda.gov/news-events/press-announcements/fda-finalizes-enforcement-policy-unauthorized-flavored-cartridge-based-e-cigarettes-appeal-children.
Federal laws establish norms for all states, but lawmakers can also create rules and regulations on a state level. The tug-of-war between state lawmakers and the Senate has led to a fractured U.S. that is neither fully pro-vape nor anti-vape.
Trends and Market Dynamics
Researchers at Truth Initiative used Neilsen Retailer Scanner Data to examine the changes in the volume, nicotine strengths, and price of e-liquids in the USA3M. C. Diaz, N. A. Silver, A. Bertrand, and B. A. Schillo, “Bigger, stronger and cheaper: growth in e-cigarette market driven by disposable devices with more e-liquid, higher nicotine concentration and declining prices,” Tobacco Control, Aug. 2023, doi: https://doi.org/10.1136/tc-2023-058033. The data spans from January 2017 to September 2022.
- Average volume capacity of disposable e-cigarettes increased by 518%, from 1.1 mL to 5.7 mL
- Average nicotine strengths increased by 294%, from 1.7% to 5%
- Price per disposable unit and milliliters of e-liquid both remained relatively constant until January 2020
- From January 2020 to September 2022, average unit prices increased by 165.7%, from $8.49 to $14.07
- During the same period, the average price of 1 mL of e-liquid decreased by 69.2%, from $7.96 to $2.45
Researchers concluded that the “current regulatory regime around e-cigarettes” has massively impacted the size and cost of e-liquids, as well as the amount of nicotine in the mixture. Manufacturers are “providing consumers with bigger, cheaper disposable e-cigarettes that come in higher nicotine strengths.”
Another review analyzed e-cigarette unit sales in the U.S. from 2020 to 20224Ali, A. B. Seidenberg, E. Crane, E. Seaman, M. A. Tynan, and K. Marynak, “E-cigarette Unit Sales by Product and Flavor Type, and Top-Selling Brands, United States, 2020–2022,” Morbidity and Mortality Weekly Report, vol. 72, no. 25, pp. 672–677, Jun. 2023, doi: https://doi.org/10.15585/mmwr.mm7225a1.
- Unit sales increased to 46.6% (7.2 million units)
- Unit shares of tobacco-flavored products decreased from 28.4% to 20.1%
- Unit shares of menthol-flavored products decreased from 10.1% to 5.9%
- Unit shares of other flavors increased from 29.2% to 41.3%
- Unit shares of disposable e-cigarettes increased from 24.7% to 51.8%
- Unit shared of prefilled cartridges decreased from 75.2% to 48%
The authors argue that “Since 2020, the availability of e-cigarette products has changed in response to multiple factors, including local and state policies to address flavored e-cigarette sales, actions undertaken by the FDA, COVID-19-related closures, and global supply chain disruptions.”
The results show that there is a new generation of disposables that have nicotine levels comparable to a few cartons of cigarettes. That, paired with the decreasing cost of individual e-liquids and disposable devices, makes vaping accessible to young people who might not have the funds to invest in the more expensive refillable devices.
Relationship Between E-Cigarette Sales and Cigarette Sales
Another study used Nielsen Retail Scanner Data from 2012-2017 to measure the impact of cigarette and e-cigarette prices on the demand in California5T. Yao, H.-Y. Sung, J. Huang, L. Chu, G. St. Helen, and W. Max, “The impact of e-cigarette and cigarette prices on e-cigarette and cigarette sales in California,” Preventive Medicine Reports, vol. 20, p. 101244, Dec. 2020, doi: https://doi.org/10.1016/j.pmedr.2020.101244.
- When the price of e-cigarettes, reusable e-cigarettes, and cigarettes increased by 1%, per capita sales decreased by 0.37%, 0.20%, and 0.21% respectively
- Cigarette prices were positively associated with per capita sales of reusable e-cigarettes, suggesting reusable e-cigarettes are a substitute for cigarettes
- Reusable e-cigarette prices were positively associated with per capita sales of disposable e-cigarettes, suggesting disposal e-cigarettes are a substitute for reusable e-cigarettes
To create a reasonable study, researchers accounted for time-fixed effects, market-fixed effects, and smoke-free air laws. They concluded that even with these considerations, “there is a significant and negative relationship between e-cigarette demand and e-cigarette prices for both disposable and reusable cigarettes.” This study also shows that Californians substitute cigarettes for e-cigarettes and reusable e-cigarettes for disposable e-cigarettes.
Cost of Vaping vs. Smoking Around the World
One study used the 2016 International Tobacco Control Four Country Vaping and Smoking Survey to analyze the cost difference between cigarettes and e-cigarettes in Australia, Canada, England, and the USA6K.-W. Cheng et al., “Costs of vaping: evidence from ITC Four Country Smoking and Vaping Survey,” Tobacco Control, vol. 30, no. 1, pp. 94–97, Feb. 2020, doi: https://doi.org/10.1136/tobaccocontrol-2019-055344.
- Disposable nicotine vaping products (NVPs) cost more than a comparable unit of combustible cigarettes in the UK, the USA, and Canada
- Prefilled cartridges are more expensive than the price of a comparable unit of cigarettes in the USA and Canada, but lower in England and Australia
- E-liquids are consistently lower than the price of a comparable unit of cigarettes in all four countries
- The upfront cost of a rechargeable device is approximately 3-5 times higher than a pack of cigarettes in all four countries
Researchers conclude that once users have purchased the relatively expensive refillable device, they can enjoy the on average lower costs of cartridges and e-liquids.
This data reveals that in 2016 disposables were more expensive than a pack of cigarettes in the UK, the U.S., and Canada. Now, disposables are one of the most affordable types of e-cigarettes. The shift could be a combination of policy changes, fluctuating hardware prices, and the growing popularity of single-serve products.
Vaping Rules and Regulations Across the Globe
A study entitled “Global Approaches to Regulating Electronic Cigarettes”7R. D. Kennedy, A. Awopegba, E. De León, and J. E. Cohen, “Global approaches to regulating electronic cigarettes,” Tobacco Control, vol. 26, no. 4, pp. 440–445, Nov. 2016, doi: https://doi.org/10.1136/tobaccocontrol-2016-053179 classifies how countries approach e-cigarette policies and regulations. It identified a total of 68 countries that have e-cigarette regulations.
- 22 countries regulate e-cigarettes using existing regulations
- 25 countries enacted new policies to regulate e-cigarettes
- 7 countries made amendments to existing regulations
- 14 countries used a combination of new/amended and existing regulations
Researchers concluded that many countries regulate e-cigarettes using legislation not written for e-cigarettes, which might explain why the U.S. made the controversial decision to classify e-cigarette devices as tobacco products in 2014.
In Nicotine & Tobacco Research, Marcus Munafò states that “definitions matter, and a legal ruling in a single country is not a sound basis for determining whether a certain definition is valid.”8M. Munafò, Ed., “Are e-Cigarettes Tobacco Products?,” Nicotine & Tobacco Research, vol. 21, no. 3, pp. 267–267, Jun. 2018, doi: https://doi.org/10.1093/ntr/nty130 He goes on to say that if all products containing nicotine derived from tobacco were labeled as “tobacco products” internationally, then nicotine-replacement therapies would also fall under the same umbrella. According to Munafò, replacement therapies are “clearly not” tobacco products.
Some countries forgo this dilemma by banning e-cigarettes, e-liquid, and related products entirely. The importation and sale of nicotine-containing e-liquid is illegal in over 40 countries, including Cambodia, India, and Lebanon.
Other countries, such as Barbados, Iran, and Panama, have banned vaping in public places. Enclosed/semi-enclosed public places, workplaces, and public transport are completely vape-free.
In countries such as Japan, Argentina, and Brazil, the rules are more ambiguous. Japan banned the sale of e-cigarettes that contain nicotine in 2010. However, Japanese vapers can still use their devices in public, provided the devices do not contain nicotine.
Vaping Rules and Regulations in the UK
UK lawmakers have been trying to combat e-cigarettes for years. In the last few months, the perfect storm of health concerns and worries over youth uptake has led to more definitive proposals.
The UK government has announced plans to ban disposable vapes, restrict vape flavors, and implement a “smoke-free generation” law. The law, which will come into effect from Jan. 1st, 2027, stops anyone born on or after Jan. 1st, 2009 from ever legally buying tobacco products, including e-cigarettes and e-liquids.
Like U.S. politicians, UK lawmakers are standing firm on their anti-vape stance. But are these rules and regulations reflected in the e-cigarette economy?
Cost of Vaping vs. Smoking in the UK
In the UK, a 20-pack of Benson & Hedges Gold cost £17.06. Each cigarette contains 1.4mg of nicotine, meaning an entire pack contains 28mg of nicotine. Smokers are likely to get 10 puffs per cigarette and 200 puffs per pack.
The equivalent is a disposable that contains 20mg of nicotine. Britons can purchase five Elf Bar 600 disposables that contain 20mg of nicotine for £20. Individual Elf Bars cost around £5. Each disposable contains 20mg of nicotine and promises up to 600 puffs.
In both the U.S. and the UK, cigarettes are more expensive than the cheapest equivalent e-cigarette. Vapers can also get a comparable amount of nicotine for less than a third of the price.
Trends and Market Dynamics
The Centre for Economics and Business Research (Cebr) conducted an extensive study on behalf of the United Kingdom Vaping Industry Association (UKVIA) to analyze the economic contribution of the vaping industry9Cebr, “Economic impact assessment of the vaping industry A Cebr report for the United Kingdom Vaping Industry Association,” 2022. Available: https://www.ukvia.co.uk/wp-content/uploads/2022/11/Cebr_Report_06092022-clean.pdf.
From 2017 to 2020, vape industry turnover increased by 23.4%, a massive £251 million. Despite the overall increase during this period, there was a slight decline in 2019, when the turnover decreased from £1.320 million to £1.241 million.
Researchers at Cebr speculate that this decline is due to the EVALI crisis, which also led to a decrease in vapers (from 3.2 million to 2.9 million) in the same year.
From 2020 to 2021, turnover decreased from £1.450 million to £1.325 million. Researchers note that the cause is unclear, but speculate that it could be due to the “changing nature of vape products as cheaper alternatives enter the market” and the fact that “vapers are using different avenues to purchase vape products.”
Final Thoughts
Consumer behavior is heavily influenced by the implementation of anti-vape regulations, and not in the way that legislators hope. Manufacturers and vapers alike rebel against new vape laws. This is apparent in the U.S. and the UK, where lawmakers are in a constant (yet unsuccessful) battle to reduce the growing number of e-cigarette users.
Instead of raising prices amid the growing threat to the livelihood of Big Vape, manufacturers have doubled down on the success of disposables, the most affordable e-cigarette product. On top of being the most affordable e-cigarette, disposables pack a punch. Cigarettes cannot compete with the low price, high nicotine strengths, and market appeal of disposable vapes.
Since 2020, research has shown a significant shift toward disposables, which has led critics to question the effectiveness of existing laws.
Despite the higher overall cost of investing in a refillable vape device, consumers are not deterred. As we’ve discovered, e-liquids are cheaper than combustible cigarettes in America, Canada, Australia, and the UK. Once consumers have bought a refillable device, they can exclusively purchase affordable e-liquids.
E-cigarettes have emerged as a significant economic force that could at one point, though not anytime soon, rival cigarettes. For now, they continue to play an important part in the economy of the U.S., the UK, and beyond.
