A Mixed Bag: The Hidden Time Costs of Regulating Consumer Behavior
66 Pages Posted: 15 Jun 2018 Last revised: 26 Jan 2019
Date Written: January 25, 2019
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: Suggested Citation