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Last night I was talking to some people and the topic came up of why there is such a broad difference in price between the different e-cigarettes available now. You can get some starter kits for as low as $18 bucks while others can run $140 or more. Then we have the free trial guys who say they will let you try it free and on the other side of the spectrum we have the mall guys who charge $150 to $200 for their offers.

What are the differences? Why is there such a wide range of prices for what is basically the same product? It is an interesting topic of discussion, so I thought I'd do a little about my thoughts here.

You Get What You Pay For

I've never been one to go cheap. I learned early in life that you get what you pay for. Yes, you may save a few bucks here and there shopping at the Wal-Marts and the Dollar Stores of the world, but in the long run you may actually end up spending more money. Cheaper goods don't usually last as long, are not of the highest quality or come with a lower level of customer service. There is a good reason for that.

Price Quality Service

Pick any two.

A few days ago we reported that the MHRA, the UK Medicines and Healthcare products Regulatory Agency, the United Kingdom's version of the FDA, wants to classify electronic cigarettes as a drug device and had scheduled a consultation meeting to hear from industry experts.

Upon learning that Prof. Carl Phillips, world renowned tobacco control expert and strong supporter of ecigs would attend at his own expense to counter the drug companies paid "experts", he was initially refused access as an independent party and had to take a temporary consultant position with E-Cigarette Direct, the UK distributor for Njoy, to gain access. The MHRA decided to reschedule the meeting instead citing a rule violation that meetings can not be held during elections. At that time it was felt that perhaps the catalyst for this decision was not a rule violation, but rather the hopes that Prof. Phillips would have to return to Canada and not be able to attend.

I was asked today to share my thoughts on the question of

Do taxes imposed on cigarettes to discourage public use really work?

She wanted to know particularly two things:

1. Improved social well being
2. Create distortion which causes a dead weight loss

I thought i'd post my response here for everyone. What do you think?

-----My Answer-----

the new fad for states to shore up their budget deficits by increasing tobacco taxes is gaining in popularity, however, the benefits of such programs are hotly debated.

Let's look at your two questions:

1- Improve Social Well Being

There are many who favor using oppressive taxes to modify the behavior of citizens, and smokers are an easy and popular target. Groups such as the Campaign for Tobacco Free Kids are calling for a $1 increase across the board and call it a WIN WIN WIN for states. They reason:

A budget win

In this they are right, raising tobacco taxes $1 a pack can raise millions of dollars for state coffers. For example: Such an increase could result in an estimated $480.1 million in new revenue for a state like Florida.

Faced with budget crunches, many states are eyeing this as an easy way to quickly increase revenue.