Is it ethical to buy noise canceling headphones with research funds?

Disclosure: we actually bought pretty expensive Bose Noise Cancelling headphones for our students recently, for the reasons you mentioned.

I think there is a very easy answer to this - will your funds cover the expenses if the purpose is reported truthfully, or will some "creative" cost reporting be required?

In the first case, I have a hard time seeing an ethical issue - as you say, equipment is equipment, and if whoever funds your research is ok with spending some of it on "potentially productivity-increasing even if ultimately not absolutely necessary" equipment, then why should you be ethically required to not make use of this option? The only case I would see where this would become an issue if you, for instance, would not actually be planning to be using the headphones much at all in the office, and are mainly looking to use them for a private purpose (but then again, if you wrote this in your expense report, whoever funds your research would probably not be ok with this expense anyway, making this more similar to the second case).

In the second case, it is pretty clearly not ethical to hack around whatever the criteria given out by your funding agency (e.g., pretending like you will need noise cancelling for a specific experiment so that it counts as costs for conducting a specific experiment rather than equipment costs, etc.).

Is it ethical to buy noise canceling headphones with research funds?

In an ideal world: yes. In the world we actually live in: in my opinion, no.

Here's my rationale. In an ideal world, people are honest and never abuse grant funds to purchase something that is not strictly needed for research, or make rationalizations for using grant money to buy something that could arguably improve productivity but also happens to be a cool electronic gadget that is fun to play with even when not working on research. In such a world, when a PI decides he/she needs to purchase noise-canceling headphones based on rational considerations that this is an effective use of grant money, this is a reasonable and ethical thing to do.

In our world, sadly, people do act out of dubious, self-deceiving and outright dishonest motivations all the time. Even the best among us are not completely immune from having our brains play tricks on us, telling us that some action we are considering taking can be justified on some ethical grounds X, when actually the real reason we want to take said action is Y, such that if Y rather than X were the stated motivation then the action would become pretty clearly unethical.

The bottom line: even if your contemplated purchase makes perfect sense for your students and lab, and even if you swear on your mother's soul that your motivation is pure as snow and you will never use the noise-canceling headphones for any recreational purpose, if we allow one PI to purchase $300 headphones we have to allow it for every PI, and I suspect 99% of the people who end up using that allowance will be doing so for the wrong reasons and with less-than-pure motivation in mind. In other words, allowing this will push the system in a harmful and possibly unsustainable direction (if we allow headphones, what about fancy stereos? Smart watches? Etc.). So, in the overall interest of encouraging an ethical use of taxpayer money, I think it makes sense to ask you to "sacrifice" the hypothetical "3%" productivity gains that you are citing as the justification for your purchase request. Personally, having myself managed to somehow be productive despite never owning noise-canceling headphones, I have a feeling you and your students will be just fine and will find a good alternative use for the $300.

I am aware of someone doing precisely this. Their office was quite open to a fairly active space, and being able to concentrate through the noise became a real issue. When this was bought up with the Administration, the solution proposed was to buy noise cancelling headphones for those affected.

They remain property of the university, the same as if they'd bought a computer, or anything else that enables them to do their research. There's not a lot of difference, in my opinion.