Abstract:
We introduce the concept of marginal hassle cost (MHC)–the opportunity cost of time required to complete burdensome administrative tasks–as a measure of non-pecuniary transaction costs. We then propose an experimental procedure to elicit the MHC and validate the approach through a large-scale field experiment on heat pump adoption in Canada. On average, the MHC is equal to respondents' wage rate, but it exhibits substantial individual heterogeneity and is only weakly correlated with wages. MHCs are systematically higher for human-assisted than for computer-assisted tasks. Our findings highlight that total hassle costs are economically significant and deter participation in government programs aimed at decarbonization.
