Workplace parking policies in an agglomeration: An illustration for Barcelona

This paper studies the role of workplace parking policies and illustrates it for the Barcelona agglomeration. We adapt the Brueckner and Franco (2018) analytical model for Western European cities by adding agglomeration externalities, public transport congestion and underground parking. Workers can choose to locate in the city centre or in the suburbs. Commuting to the city centre requires either commuting by car and parking or public transport. Two policies to address inefficiencies of employer-paid parking are compared: employee-paid parking and a workplace parking levy. It is shown how employee-paid parking generates additional agglomeration economies, while a workplace parking levy may have opposite effects. The numerical illustration for Barcelona indicates that the welfare effects of workplace parking policies in a second-best setting are dominated by agglomeration effects. These are three times larger than the welfare changes in the transport and land use markets.