Explaining the Economics Behind E-Cigarettes, Rational Behaviour & UK Government Policy

Is choosing to vape a rational decision? This engaging video dives into the economic theory behind vaping behaviour—particularly among young people—and explores the growing public health debate surrounding e-cigarettes in the UK.

Using rational choice theory, we unpack why some adults might consider vaping a logical alternative to smoking. But we don’t stop there—we look deeper into bounded rationality, imperfect information, and the powerful influence of peer pressure and advertising. With usage rising rapidly among 16-24 year-olds, is the choice to vape always made with full awareness of the costs and consequences?

We also examine the latest proposed UK government interventions:

🔹 Age restrictions

🔹 Taxation on vaping products (including the upcoming £2.20 per 10ml excise duty from October 2026)

🔹 Regulations on vape product ingredients, sales points & advertising

🔹 The economic impact of taxing a product with low PED (Price Elasticity of Demand)

📈 Ideal for students studying microeconomics, behavioural economics, or preparing for exam topics on government intervention and market failure.