Electronic cigarettes – relief for smoker’s health or another corporation lie?

Probably many of you have come across a new invention called the electronic cigarettes. They look similar to the ‘normal’ ones, but work in a different way. They have nicotine in their filter and generate heat that creates a water vapor that allows smoker to ‘puff’ with no tobacco nor carbon-monoxide. That bypasses the law against smoking in pubs, and allegedly allows one to smoke without the health risk. The price for one is about 40 pounds. As noted earlier they are advertised as not perfectly healthy cigarettes (as it is a new product and no one knows if it actually works. They say that it is much too early to judge if the new product is completely safe. As they were not properly tested there is high probability that the cigarettes are a health risk, and might be even worse than regular cigarettes.

The information failure may occur if the electronic cigarettes turns out to be a health risk. The fact that producers lies to customers, provides him with false information and in effect makes the people believe that they do not have to worry about their health and can smoke as much as they want. As it most probably makes them smoke more, those people are going to generate costs for the NHS. The problem of the lack of information also concerns also the government as it does not know if it should ban the electronic cigarettes or not.

The asymmetric information here occurs when we consider the fact that some of the companies producing the electronic cigarettes write on their boxes that they recommended by the World Health Organisation, which is not true. As we do not know for sure if the cigarettes are harmful, it is hard to tell how big the asymmetry information is in this particular case.

The outcome of this information failure also depends on the actual impact of the electronic cigarettes on health. As they are probably far more negative than the producers claim, the outcome of this information failure on the free market is the aggrandisement of NHS expenses and the probable capital losses of tobacco companies.

What the government should do in my opinion is take a lesson and impose a law that won’t allow any companies to put on the market, products that have not been properly tested. It should also make the companies that sell electronic cigarettes, withdraw the product as long as it has not been properly examined by medical authorities and recognised as not dangerous for customers health.