E-Cigarettes and Smoking : Correlation, Causation, and Selection Bias

Some public health officials discourage smokers from using electronic nicotine delivery systems (ENDS, or “e-cigarettes”) as a cessation aid because ENDS use and smoking are positively correlated. Such correlation does not imply that the causal treatment effect of ENDS use on cessation from smoking is negative, however, due to selection bias. This paper estimates the treatment effect of ENDS use on cessation using data from Korea. After showing that ENDS use and smoking are positively correlated in the data, we investigate selection bias and show that a tax increase and negative pronouncements regarding ENDS by the government shifted ENDS use towards those smokers for whom cessation is less likely. After accounting for unobserved confounding characteristics of individuals with regression models for endogenous treatment effects, we find that the evidence suggests that ENDS promote cessation. The average treatment effect on the treated (ATET) is estimated with parametric and moment-based methods, and in the preferred results is found to be in the range of 10.3 to 16.9 percentage points. The Korean government’s discouragement of ENDS use by smokers may create a massive lost opportunity to reduce smoking and improve public health