New research finds statewide menthol cigarette bans backfire

Key Takeaways:

• The statewide menthol cigarette ban isn’t working.
• A higher tax on menthol cigarettes or a federal ban may be more effective.

BALTIMORE, MD, May 8, 2024 – Because public health experts have determined that menthol-flavored cigarettes pose higher health risks to smokers than non-menthol varieties, policymakers for years have considered banning menthol. Most of the measures taken to date have been at the state level, but new research suggests that this approach has backfired. The better alternative, researchers suggest, is a higher tax on menthol cigarettes, or a national ban at the federal level.

The study published in the INFORMS journal Marketing Science, “Making a Smooth Exit? Menthol Bans and Cigarette Sales in Massachusetts,” is authored by Ali Goli and Simha Mummalaneni, both of the University of Washington, and Pradeep Chintagunta of the University of Chicago.

“Many of the efforts to curb menthol cigarette consumption involve local bans on the sale of menthols, but more recently, state and federal authorities have been considering whether it is a good option for them to implement these bans at a wider scale. We decided to study the impacts of the first statewide menthol ban in the United States, which was implemented in Massachusetts,” said Chintagunta. “The state instituted its own menthol cigarette ban in 2020 to mixed results.”

To conduct their research, the study authors analyzed retail sales data throughout the state of Massachusetts and in neighboring states in 2019 and 2020, and paid close attention to retail sales just over the Massachusetts state line.

“We found that some Massachusetts residents did switch to non-menthol cigarettes; non-menthol cigarette demand rose by 10% after the ban was introduced in that state. Given that menthols are about one-third of cigarette sales, at face value, this makes it seem like overall cigarette demand among Massachusetts residents went down because of the ban,” said Goli. “However, we detected a sharp increase in cross-border menthol cigarette shopping when menthol cigarettes were no longer available in Massachusetts.”

“Cross-border shopping leads to two downsides that resulted from the statewide ban,” added Mummalaneni. “Massachusetts lost out on a significant amount of tax revenue while also not fully eliminating menthol cigarette consumption among its residents. In other words, compared to a statewide tax on menthol cigarettes, the statewide ban meant that Massachusetts did not realize any tax revenue benefits while also not yielding major public health benefits.” 

The study authors concluded that a better and more effective approach may be applying a higher tax on menthol cigarettes or pursuing a national federal ban on the products, instead of instituting statewide bans.

Link to Study

About INFORMS and Marketing Science

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at www.informs.org or @informs.

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