Time Cost and Demand: Implications for Public Policy.

Abstract

The success of policy involves not only good design but a good understanding of how the public will respond behaviorally to the benefits or detriments of that policy. Behavioral science has greatly contributed to how we understand the impact of monetary costs on behavior and has therefore contributed to policy design. Consumption taxes are a direct result of this; for example, cigarette taxes that aim to reduce cigarette consumption. In addition to monetary costs, time may also be conceptualized as a constraint on consumption. Time costs may therefore have policy implications, for example, long waiting times could deter people from accessing certain benefits. Recent data show that behavioral economic demand curve methods used to understand monetary cost may also be used to understand time costs. In this article we discuss how the impact of time cost can be conceptualized as a constraint on demand for public benefits utilization and public health when there are delays to receiving the benefits. Policy examples in which time costs may be relevant and demand curve methods may be useful are discussed in the areas of government benefits, public health, and transportation design.