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

43 Pages Posted: 15 Jun 2018 Last revised: 14 May 2021

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 regulations are challenging to quantify, and thus easily overlooked. Using quasi-experimental policy variation and high-frequency supermarket data, this paper identifies previously hidden time costs from policies that ban or tax the use of disposable carryout bags. Bag policies disrupt checkout procedures, causing a 3% increase in supermarket checkout duration. Given the capacity-constrained queueing system of supermarket checkout, the slowdown of individual customers compounds into congestion larger than the individual slowdown during peak shopping hours. These hassle costs do not disappear over time, and instead, persist at least two years after policy implementation. Customers are also sensitive to these costs, with a one-minute increase in average checkout duration leading to a 1.2% drop in the likelihood customers return to the store in subsequent weeks. The results show ignoring time costs, as well as institutional constraints, overstates the welfare gains from policy-induced behavioral change.

Keywords: prescriptive regulation; non-monetary costs; consumer behavior; event study; time use; queueing; persistent effects; plastic

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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