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 is positively correlated with smoking. Such correlation does not imply that the causal treatment effect of ENDS use on cessation from smoking is negative, however, due to selection bias. We estimate the treatment effect of ENDS use on cessation. After showing that ENDS use and smoking are positively correlated in data from Korea, we investigate selection bias and show that a tax increase and the government’s negative pronouncements regarding ENDS shifted ENDS use toward 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 is found to be in the range of 10.1 to 16.4 percentage points from copula models and 17.0 percentage points from a moment-based estimator. The ATET from the results preferred by formal model selection criteria is 16.2 percentage points. The Korean government’s discouragement of ENDS use by smokers may therefore create a massive lost opportunity to reduce smoking and improve public health.