Higher E-Cigarette Taxes Cut Teen Vaping Despite Social and Digital Access

When states raise taxes on e-cigarettes, many parents and policymakers worry that teenagers will simply find another way to get their hands on vaping products. After all, most teens do not buy vapes directly from stores. They borrow from friends, ask someone older to make the purchase, or sometimes order online. So do taxes actually work?

A new study by researchers from Michigan State University, Bentley University, Wake Forest University, San Diego State University's Center for Health Economics and Policy Studies, and the National Bureau of Economic Research suggests that they do. Even when teens rely heavily on social networks, higher vape taxes still reduce youth vaping in meaningful ways.

Most Teens Don't Buy From Stores

One of the key concerns behind the research is how teenagers get e-cigarettes in the first place. National survey data show that only about one in four teen vapers usually buy their own products from a store such as a vape shop or convenience store. The majority rely on social sources. That can mean borrowing from friends, getting a device from a family member, or asking someone else to buy it for them.

A small percentage also reports buying online.

Because of this, some experts questioned whether retail taxes would have much effect. If a teen is not paying the store price directly, would a higher tax really make a difference?

What the Researchers Did

To answer this question, the researchers analyzed data from two major national surveys. The first tracks high school students across states over time. The second follows individuals for several years, allowing researchers to see when young people start vaping and whether they quit.

Over the past decade, many states introduced or increased taxes on e-cigarette liquids. Some adopted modest taxes, while others imposed steep per milliliter charges that significantly raised prices. The researchers compared youth vaping trends in states that raised taxes with trends in states that did not, while also accounting for other policies such as age restrictions, flavor bans, cigarette taxes, and economic conditions.

This approach allowed them to isolate the specific impact of vape taxes on teen behavior.

The Big Finding: Taxes Reduce Teen Vaping

The results are clear. When states increase e-cigarette taxes, youth vaping declines. A one-dollar increase in the tax per milliliter of e-liquid is linked to a drop of about two to three percentage points in the share of high school students who report vaping in the past month. Given overall vaping rates in the mid to high teens, that is a meaningful reduction.

Importantly, taxes appear to prevent teens from starting. The study shows that higher prices significantly reduce initiation into vaping. In other words, fewer young people begin using e-cigarettes when they become more expensive. There is less evidence that taxes cause existing teen users to quit, but stopping initiation is critical for long-term public health.

What Happens in the "Friend Network"?

One of the most surprising findings is what happens in informal social markets. Higher taxes do not just reduce store purchases. They also reduce borrowing, third-party purchases, and other social sourcing.

This suggests that price increases ripple through friend networks. When a vape device becomes more expensive, teens may be less willing to share it. Someone who buys a device may think twice before lending it out. People who buy on behalf of others may pass along the higher cost. Even theft and "other" informal ways of getting vapes decline.

In short, social networks do not fully shield teens from higher prices.

There is one exception. The researchers find a small increase in online purchasing after tax hikes. While the number of teens buying online remains relatively low, the shift suggests that digital marketplaces could become a partial workaround if enforcement is weak.

Why This Matters for Policy

The overall message is encouraging for lawmakers. Even though many teens get e-cigarettes through friends rather than stores, taxes still reduce youth vaping. The impact is strongest among younger teens and among those who might otherwise have started using e-cigarettes.

Taxes alone are not a complete solution. Online sales and enforcement remain important challenges. But the basic economic principle still applies: when the price goes up, demand goes down.

For communities worried about youth nicotine addiction, the study offers evidence that vape taxes remain one of the most effective tools available.