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The On-Street Parking Premium and Car Drivers' Choice between Street and Garage Parking

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Author Info

  • Martijn Kobus

    ()
    (VU University Amsterdam)

  • Eva Gutierrez Puigarnau

    ()
    (VU University Amsterdam)

  • Piet Rietveld

    ()
    (VU University Amsterdam)

  • Jos Van Ommeren

    ()
    (VU University Amsterdam)

Abstract

We introduce a methodology to estimate the effect of parking prices on car drivers' choice between street and garage parking. Our key identifying assumption is that the marginal benefit of parking duration does not depend on this choice. The endogeneity of parking duration is acknowledged in the estimation procedure. We apply the methodology to an area where cruising for parking is absent, street parking is ubiquitous and garage parking is discretely located over space. So, in this area, the average distance to the final destination is longer for garage parking than for street parking. We find that drivers are willing to pay a premium for street parking which ranges from euro 0.35 to euro 0.58. Given a parking duration of one hour, we find that the demand for street parking is extremely price elastic: the price elasticity of demand for the share of street parking is -4. However, the price elasticity is much smaller for shorter parking durations. Our estimates imply that even small reductions in street parking prices induce a strong increase in the stock of cars parked on-street. Our estimates also imply that a policy which contains an on-street premium (so street prices exceed garage prices) is welfare improving, because drivers with longer parking durations are induced to use parking locations that are, on average, farther away.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 12-040/3.

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Date of creation: 20 Apr 2012
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Handle: RePEc:dgr:uvatin:20120040

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Web page: http://www.tinbergen.nl

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Keywords: street parking; garage parking;

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  1. Shoup, Donald C., 2006. "Cruising for parking," Transport Policy, Elsevier, vol. 13(6), pages 479-486, November.
  2. Arnott, Richard & Rowse, John, 2009. "Downtown parking in auto city," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 1-14, January.
  3. Hasker, Kevin & Inci, Eren, 2012. "Free Parking for All in Shopping Malls," MPRA Paper 35978, University Library of Munich, Germany.
  4. Anderson, Simon P. & de Palma, Andre, 2004. "The economics of pricing parking," Journal of Urban Economics, Elsevier, vol. 55(1), pages 1-20, January.
  5. Calthrop, Edward & Proost, Stef, 2006. "Regulating on-street parking," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 29-48, January.
  6. Glazer, Amihai & Niskanen, Esko, 2001. "Parking fees and congestion," University of California Transportation Center, Working Papers qt9h51t02k, University of California Transportation Center.
  7. Richard Arnott & Eren Inci, 2005. "An Integrated Model of Downtown Parking and Traffic Congestion," Boston College Working Papers in Economics 608, Boston College Department of Economics.
  8. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1991. "A temporal and spatial equilibrium analysis of commuter parking," Journal of Public Economics, Elsevier, vol. 45(3), pages 301-335, August.
  9. John Golias & George Yannis & Michel Harvatis, 2002. "Off-Street Parking Choice Sensitivity," Transportation Planning and Technology, Taylor & Francis Journals, Taylor & Francis Journals, vol. 25(4), pages 333-348, January.
  10. Jos van Ommeren & Derk Wentink & Piet Rietveld, 2010. "Empirical Evidence on Cruising for Parking," Tinbergen Institute Discussion Papers 10-028/3, Tinbergen Institute.
  11. Jos van Ommeren & Derk Wentink, 2010. "The (Hidden) Cost of Employer Parking Policies," Tinbergen Institute Discussion Papers 10-048/3, Tinbergen Institute.
  12. Hensher, David A. & King, Jenny, 2001. "Parking demand and responsiveness to supply, pricing and location in the Sydney central business district," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(3), pages 177-196, March.
  13. van Ommeren, Jos & Wentink, Derk & Dekkers, Jasper, 2011. "The real price of parking policy," Journal of Urban Economics, Elsevier, vol. 70(1), pages 25-31, July.
  14. Shoup, Donald C., 2006. "Cruising for Parking," University of California Transportation Center, Working Papers qt55s7079f, University of California Transportation Center.
  15. Arnott, Richard & Inci, Eren & Rowse, John, 2011. "Downtown Parking and Traffic Congestion: A Diagrammatic Exposition," University of California Transportation Center, Working Papers qt4sb0975r, University of California Transportation Center.
  16. Richard Arnott, 2005. "Spatial Competition between Parking Garages and Downtown Parking Policy," Boston College Working Papers in Economics 627, Boston College Department of Economics.
  17. Kelly, J. Andrew & Clinch, J. Peter, 2009. "Temporal variance of revealed preference on-street parking price elasticity," Transport Policy, Elsevier, vol. 16(4), pages 193-199, August.
  18. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
  19. Andrew Kelly, J. & Peter Clinch, J., 2006. "Influence of varied parking tariffs on parking occupancy levels by trip purpose," Transport Policy, Elsevier, vol. 13(6), pages 487-495, November.
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Cited by:
  1. Arnott, Richard & Rowse, John, 2009. "Curbside Parking Time Limits," University of California Transportation Center, Working Papers qt21p8f8b2, University of California Transportation Center.
  2. van Ommeren, Jos & de Groote, Jesper & Mingardo, Giuliano, 2014. "Residential parking permits and parking supply," Regional Science and Urban Economics, Elsevier, vol. 45(C), pages 33-44.

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