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Regulating on-street parking

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  • Calthrop, Edward
  • Proost, Stef

Abstract

Consider the choices available to a shopper driving to a city and trying to park downtown. One option, typical to many cities, is to follow the signposts to an off-street parking facility, which is often privately operated. Another option is to search for an on-street spot. If this proves unsuccessful, it is always possible to return to the off-street facility. We formalise such a setting and examine optimal on-street parking policy in the presence of an off-street market. Not surprisingly, the amount of socially-wasteful searching behaviour is shown to depend on the prices of both the off- and on-street market. If the off-street market is run competitively, optimal on-street policy reduces to a simple and attractive rule: set the on-street price equal to the resource cost of off-street parking supply. Other pricing rules result in either excessive searching behaviour or excessive off-street investment costs. Time restrictions - a common alternative to on-street fees - are also shown to be inefficient. In practice, however, off-street markets are unlikely to be competitive. We examine the case of a single off-street supplier playing as a Stackelberg follower to the government regulated on-street market. Based on a numerical example (calibrated to London), optimal on-street policy is shown to either involve setting a relatively high on-street price, such that the monopolist is induced to undercut and gain the entire parking demand, or setting a relatively low price, while the monopolist maximises profit on the residual demand curve. Which strategy is optimal is shown to be parameter dependent.
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Suggested Citation

  • Calthrop, Edward & Proost, Stef, 2006. "Regulating on-street parking," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 29-48, January.
  • Handle: RePEc:eee:regeco:v:36:y:2006:i:1:p:29-48
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    References listed on IDEAS

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    Cited by:

    1. Caicedo, Felix & Diaz, Alejandra, 2013. "Case analysis of simultaneous concessions of parking meters and underground parking facilities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 358-378.
    2. Kevin Hasker & Eren Inci, 2014. "Free Parking For All In Shopping Malls," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 1281-1304, November.
    3. Eren Inci & Jos van Ommeren & Martijn Kobus, 2017. "The external cruising costs of parking," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1301-1323.
    4. DE BORGER, Bruno & RUSSO, Antonio, 2015. "Lobbying and the political economy of pricing car access to downtown commercial districts," Working Papers 2015012, University of Antwerp, Faculty of Applied Economics.
    5. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    6. Molenda, Inga & Sieg, Gernot, 2013. "Residential parking in vibrant city districts," Economics of Transportation, Elsevier, vol. 2(4), pages 131-139.
    7. Kobus, Martijn B.W. & Gutiérrez-i-Puigarnau, Eva & Rietveld, Piet & Van Ommeren, Jos N., 2013. "The on-street parking premium and car drivers' choice between street and garage parking," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 395-403.
    8. 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.
    9. 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.
    10. Calthrop, Edward & Proost, Stef, 2006. "Regulating on-street parking," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 29-48, January.
    11. Inci, Eren & Lindsey, Robin, 2015. "Garage and curbside parking competition with search congestion," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 49-59.
    12. Arnott, Richard & Inci, Eren & Rowse, John, 2015. "Downtown curbside parking capacity," Journal of Urban Economics, Elsevier, vol. 86(C), pages 83-97.
    13. Levy, Nadav & Render, Marc & Benenson, Itzhak, 2015. "Spatially explicit modeling of parking search as a tool for urban parking facilities and policy assessment," Transport Policy, Elsevier, vol. 39(C), pages 9-20.
    14. repec:eee:transa:v:102:y:2017:i:c:p:51-67 is not listed on IDEAS
    15. Chaniotakis, Emmanouil & Pel, Adam J., 2015. "Drivers’ parking location choice under uncertain parking availability and search times: A stated preference experiment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 228-239.
    16. Arnott, Richard, 2006. "Spatial competition between parking garages and downtown parking policy," Transport Policy, Elsevier, vol. 13(6), pages 458-469, November.
    17. Madsen, Edith & Mulalic, Ismir & Pilegaard, Ninette, 2013. "A model for estimation of the demand for on-street parking," MPRA Paper 52301, University Library of Munich, Germany.
    18. repec:eee:transb:v:101:y:2017:i:c:p:107-122 is not listed on IDEAS
    19. Takayama, Yuki & Kuwahara, Masao, 2016. "Scheduling preferences, parking competition, and bottleneck congestion: A model of trip timing and parking location choices by heterogeneous commuters," MPRA Paper 68938, University Library of Munich, Germany.
    20. Arnott, Richard & Rowse, John, 2009. "Downtown parking in auto city," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 1-14, January.
    21. Inge Mayeres & Stef Proost, 2004. "Towards better transport pricing and taxation in Belgium," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(4), pages 23-43.
    22. Inci, Eren, 2015. "A review of the economics of parking," Economics of Transportation, Elsevier, vol. 4(1), pages 50-63.
    23. Jan K. Brueckner & Sofia F. Franco, 2015. "Parking and Urban Form," CESifo Working Paper Series 5324, CESifo Group Munich.
    24. Andersson, Matts & Mandell, Svante & Thörn, Helena Braun & Gomér, Ylva, 2016. "The effect of minimum parking requirements on the housing stock," Transport Policy, Elsevier, vol. 49(C), pages 206-215.
    25. De Borger, Bruno & Russo, Antonio, 2017. "The political economy of pricing car access to downtown commercial districts," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 76-93.

    More about this item

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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