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Employer-paid parking, mode choice, and suburbanization

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  • Brueckner, Jan K.
  • Franco, Sofia F.

Abstract

This paper constructs a theoretical model that facilitates analysis of the effects of employer-paid parking on mode choice, road investment and suburbanization. The model simplifies urban space by dividing it into two zones (islands), center and suburbs, which are connected by a congested road and a public-transit line. Each road commuter requires an allotment of CBD land for parking, and because the central zone’s area is fixed, parking land reduces the amount available for central residences and CBD production. The model characterizes optimal resource allocation from the perspective of a social planner. The planning solution can be decentralized, which requires employee- rather than employer-paid parking, congestion tolls, and a tax (subsidy) to offset the road capacity deficit (surplus). The analysis then considers the effect of switching to employer-paid parking, with the burden of parking costs shifting from road users to employers, thus reducing the wage for all workers. This switch inefficiently increases road usage and capacity investment, while spurring an inefficient increase in suburbanization.

Suggested Citation

  • Brueckner, Jan K. & Franco, Sofia F., 2018. "Employer-paid parking, mode choice, and suburbanization," Journal of Urban Economics, Elsevier, vol. 104(C), pages 35-46.
  • Handle: RePEc:eee:juecon:v:104:y:2018:i:c:p:35-46
    DOI: 10.1016/j.jue.2017.12.002
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    Citations

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    Cited by:

    1. Khordagui, Nagwa, 2019. "Parking prices and the decision to drive to work: Evidence from California," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 479-495.
    2. Evangelinos, Christos & Tscharaktschiew, Stefan & Marcucci, Edoardo & Gatta, Valerio, 2018. "Pricing workplace parking via cash-out: Effects on modal choice and implications for transport policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 369-380.
    3. Shin, Eun Jin, 2020. "Commuter benefits programs: Impacts on mode choice, VMT, and spillover effects," Transport Policy, Elsevier, vol. 94(C), pages 11-22.
    4. Larson, William & Zhao, Weihua, 2020. "Self-driving cars and the city: Effects on sprawl, energy consumption, and housing affordability," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    5. Leibowicz, Benjamin D., 2020. "Urban land use and transportation planning for climate change mitigation: A theoretical framework," European Journal of Operational Research, Elsevier, vol. 284(2), pages 604-616.

    More about this item

    Keywords

    Employer-paid parking; Mode choice; Suburbanization; Cash-out;

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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