Over the past 20 years, several nicotine replacement therapies (NRTs) have been approved for use as smoking cessation aids,
with over-the-counter use of these products approved beginning in 1996. To date, only one econometric study has examined the
impact of NRT on cigarette demand, providing limited evidence that the availability of these products has reduced cigarette
demand. This paper adds to this limited literature by examining the impact of NRT availability, pricing, and use on U.S. cigarette
demand, concluding that NRT is a substitute for cigarettes and that the elasticity of cigarette demand with respect to NRT
sales is-0.06.
Support for this research has been provided by GlaxoSmithKline Consumer Healthcare. We thank Stavros Tsipas, Tomas Rinkunas,
and Kenneth Jackson for excellent research assistance.