Relationship Between Product Features and the Prices of e-Cigarette Devices Sold in Web-Based Vape Shops: Comparison Study Using a Linear Regression Model.

Abstract

Open-system electronic cigarette (EC) product features, such as battery capacity, maximum output wattage, and so forth, are major components that drive product costs and may influence use patterns. Moreover, continued innovation and monitoring of product features and prices will provide critical information for designing appropriate taxation policies and product regulations. This study will examine how product features are associated with the prices of devices sold in web-based vape shops. We draw samples from 5 popular, US-based, web-based vape shops from April to August 2022 to examine starter kits, device-only products, and e-liquid container-only products. We implemented a linear regression model with a store-fixed effect to examine the association between device attributes and prices. EC starter kits or devices vary significantly by type, with mod prices being much higher than pod and vape pen prices. The prices of mod starter kits were even lower than those of mod devices, suggesting that mod starter kits are discounted in web-based vape shops. The price of mod kits, mod device-only products, and pod kits increased as the battery capacity and output wattage increased. For vape pens, the price was positively associated with the volume size of the e-liquid container. On the other hand, the price of pod kits was positively associated with the number of containers. A unit-based specific tax, therefore, will impose a higher tax burden on lower-priced devices such as vape pens or pod systems and a lower tax burden on mod devices. A volume- or capacity-based specific tax on devices will impose a higher tax burden on vape pens with a larger container size. Meanwhile, ad valorem taxes pegged to wholesale or retail prices would apply evenly across device types, meaning those with advanced features such as higher battery capacities and output wattage would face higher rates. Therefore, policy makers could manipulate tax rates by device type to discourage the use of certain device products.