A Mixed Bag: The Hidden Time Costs of Regulating Consumer Behavior

66 Pages Posted: 15 Jun 2018 Last revised: 26 Jan 2019

See all articles by Rebecca Taylor

Rebecca Taylor

The University of Sydney - School of Economics

Date Written: January 25, 2019

Abstract

The non-monetary costs consumers experience from price and quantity regulations are challenging to quantify, and thus easily overlooked. Using quasi-experimental policy variation and high-frequency supermarket data, this paper identifies time costs from policies that ban and tax the use of disposable carryout bags (DCB). DCB policies cause persistent 3% increases in supermarket checkout duration. Given the capacity constrained queueing system of supermarket checkout, the slowdown of individual customers compounds into a congestion externality 28 times larger than the initial slowdown. Customers respond to time costs at checkout by decreasing the likelihood they return to the store in subsequent weeks.

Keywords: environmental regulation, consumer behavior, time costs, event study

JEL Classification: D12, D62, L51; L81; H23, Q52, Q58

Suggested Citation

Taylor, Rebecca, A Mixed Bag: The Hidden Time Costs of Regulating Consumer Behavior (January 25, 2019). Available at SSRN: https://ssrn.com/abstract=3186504 or http://dx.doi.org/10.2139/ssrn.3186504

Rebecca Taylor (Contact Author)

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
Sydney, NSW 2006
Australia

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