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Employer-provided parking: Departure time choice, investment decision, and welfare effects

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  • Li, Zhi-Chun
  • Deng, Yao
  • de Palma, André

Abstract

Employer-provided parking (EP) has become a prevalent way to reduce employees' parking delays and late arrivals through offering them free or low-price parking spaces at the workplace. This paper explores the EP effects on employees' trip scheduling, employer's EP investment decision, and commercial parking operator's pricing decision. An analytical trip scheduling equilibrium model is first presented to model the interaction between EP provision and employees' departure time choices during morning commute. A profit maximization model incorporating the employee productivity is then developed to determine the employer's optimal EP investment decision. A competitive game between employer's investment decision and commercial parking operator's parking pricing decision is analytically investigated, together with the effects of EP investment on social welfare. The results show that the EP investment can lead to a win-win situation with decreased employee commuting cost and increased firm production output; and the employer would like to provide only part of the employees with EP services. The competitive game solutions depend very much on the marginal costs of EP and commercial parking spaces. The EP investment with an excessively high commercial parking fee may hurt the society due to decreased social welfare.

Suggested Citation

  • Li, Zhi-Chun & Deng, Yao & de Palma, André, 2024. "Employer-provided parking: Departure time choice, investment decision, and welfare effects," Regional Science and Urban Economics, Elsevier, vol. 109(C).
    • Handle: RePEc:eee:regeco:v:109:y:2024:i:c:s0166046224000875
    DOI: 10.1016/j.regsciurbeco.2024.104056
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    More about this item

    Keywords

    Employer-provided parking; Commuting behavior; Bottleneck model; Productivity; Investment decision; Social welfare;
    All these keywords.

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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