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Drivers' willingness to pay for curb parking (rather than in a garage)

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  • Martijn Kobus

    ()

  • Eva Gutiérrez-i-Puigarnau
  • Piet Rietveld

    ()

  • Jos Van Ommeren

    ()

Abstract

Although the growing economics of parking literature almost exclusively focuses on the drivers' choice between curb and garage parking (and the consequences of non-optimal pricing), we are not aware of a substantial literature of revealed-preference studies which examines this choice. As a result, we currently have little or no knowledge to what extent differences between on-street and garage parking prices affect this choice. We introduce and apply an easy-to-implement methodology to estimate drivers’ willingness to pay for curb parking (relative to garage parking), using information from administrative data about parking choice and parking duration for one particular city. This kind of administrative data is widely available in many other cities around the world. So, one of the advantages of our methodology is that it easily be reapplied in other cities. In essence, we estimate the effect of parking prices on parking choice (i.e. street or garage), given information about parking durations. Our methodology is based on the observation that the differences in prices for on-street and garage parking depends on parking duration. So, conditional on (anticipated) parking duration, drivers face different pricing schemes. The endogeneity of parking duration is acknowledged in the estimation procedure. We show that drivers’ willingness to pay for curb parking (relative to garage parking) is positive and about € 0.35 - 0.58. When we assume a car drivers’ value of time of € 5.00 per hour, our results imply that drivers save about 4 - 7 minutes when parking on-street. This seems a reasonable result. Our results also imply that car drivers are rather sensitive to small price differences between street and garage parking, which makes sense as both are close substitutes. For example, if curb parking were only 33 percent cheaper than garage parking, the on-street stock of cars would increase threefold. Our estimates strongly suggest that a parking regime including curb prices that are (slightly) higher than garage prices is welfare improving, in particular because drivers with longer parking durations are induced to use garage parking. Key-words: Curb parking, garage parking, parking policy. JEL code: R41

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa12p753.

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Date of creation: Oct 2012
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Handle: RePEc:wiw:wiwrsa:ersa12p753

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  1. Arnott, Richard & Inci, Eren, 2006. "An integrated model of downtown parking and traffic congestion," Journal of Urban Economics, Elsevier, vol. 60(3), pages 418-442, November.
  2. Shoup, Donald C., 2006. "Cruising for Parking," University of California Transportation Center, Working Papers qt55s7079f, University of California Transportation Center.
  3. Jos van Ommeren & Derk Wentink & Piet Rietveld, 2010. "Empirical Evidence on Cruising for Parking," Tinbergen Institute Discussion Papers 10-028/3, Tinbergen Institute.
  4. Arnott, Richard & Rowse, John, 2009. "Downtown parking in auto city," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 1-14, January.
  5. Jos van Ommeren & Derk Wentink, 2010. "The (Hidden) Cost of Employer Parking Policies," Tinbergen Institute Discussion Papers 10-048/3, Tinbergen Institute.
  6. Glazer, Amihai & Niskanen, Esko, 1992. "Parking fees and congestion," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 123-132, March.
  7. 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.
  8. Edward Calthrop & Stef Proost, 2004. "Regulating on-street parking," Energy, Transport and Environment Working Papers Series ete0410, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  9. Richard Arnott, 2005. "Spatial Competition between Parking Garages and Downtown Parking Policy," Boston College Working Papers in Economics 627, Boston College Department of Economics.
  10. John Golias & George Yannis & Michel Harvatis, 2002. "Off-Street Parking Choice Sensitivity," Transportation Planning and Technology, Taylor & Francis Journals, vol. 25(4), pages 333-348, January.
  11. Richard Arnott, 1990. "A Temporal and Spatial Equilibrium Analysis of Commuter Parking," Discussion Papers 884, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  12. Anderson, Simon P. & de Palma, Andre, 2004. "The economics of pricing parking," Journal of Urban Economics, Elsevier, vol. 55(1), pages 1-20, January.
  13. 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.
  14. Shoup, Donald C., 2006. "Cruising for parking," Transport Policy, Elsevier, vol. 13(6), pages 479-486, November.
  15. Hasker, Kevin & Inci, Eren, 2012. "Free Parking for All in Shopping Malls," MPRA Paper 35978, University Library of Munich, Germany.
  16. 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.
  17. Richard Arnott & Eren Inci & John Rowse, 2012. "Downtown Parking and Traffic Congestion: A Diagrammatic Exposition," ERSA conference papers ersa12p611, European Regional Science Association.
  18. 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.
  19. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
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Cited by:
  1. Arnott, Richard & Rowse, John, 2013. "Curbside parking time limits," Transportation Research Part A: Policy and Practice, Elsevier, vol. 55(C), pages 89-110.
  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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