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The on-street parking premium and car drivers' choice between street and garage parking

  • Kobus, Martijn B.W.
  • Gutiérrez-i-Puigarnau, Eva
  • Rietveld, Piet
  • Van Ommeren, Jos N.

We introduce a methodology to estimate the effect of parking prices on car drivers' choice between street and garage parking. Our key identifying assumption is that the marginal benefit of parking duration does not depend on this choice. The endogeneity of parking duration is acknowledged in the estimation procedure. We apply the methodology during daytime hours to an area where cruising for parking is absent, street parking is ubiquitous and garage parking is discretely located over space. So, in this area, the average distance to the final destination is longer for garage parking than for street parking. We find that drivers are willing to pay a premium for street parking which ranges from € 0.37 to € 0.60. Given a parking duration of 1h, we find that the demand for street parking is price elastic: the price elasticity of demand for the share of street parking is −5.5. However, this price elasticity is much smaller for shorter parking durations. Our estimates imply that even small reductions in street parking prices induce a strong increase in the stock of cars parked on-street. Our estimates also imply that a policy which contains a street premium (so street prices exceed garage prices) is welfare improving, because drivers with longer parking durations are induced to use parking locations that are, on average, farther away, so this policy reduces total walking time.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 43 (2013)
Issue (Month): 2 ()
Pages: 395-403

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Handle: RePEc:eee:regeco:v:43:y:2013:i:2:p:395-403
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  1. Richard Arnott & John Rowse, 2007. "Downtown Parking in Auto City," Boston College Working Papers in Economics 665, Boston College Department of Economics.
  2. Shoup, Donald C., 2006. "Cruising for parking," Transport Policy, Elsevier, vol. 13(6), pages 479-486, November.
  3. Shoup, Donald C., 2006. "Cruising for Parking," University of California Transportation Center, Working Papers qt55s7079f, University of California Transportation Center.
  4. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1991. "A temporal and spatial equilibrium analysis of commuter parking," Journal of Public Economics, Elsevier, vol. 45(3), pages 301-335, August.
  5. Anderson, Simon P. & de Palma, Andre, 2004. "The economics of pricing parking," Journal of Urban Economics, Elsevier, vol. 55(1), pages 1-20, January.
  6. Richard Arnott & Eren Inci & John Rowse, 2012. "Downtown Parking and Traffic Congestion: A Diagrammatic Exposition," ERSA conference papers ersa12p611, European Regional Science Association.
  7. Hasker, Kevin & Inci, Eren, 2012. "Free Parking for All in Shopping Malls," MPRA Paper 35978, University Library of Munich, Germany.
  8. Richard Arnott, 2005. "Spatial Competition between Parking Garages and Downtown Parking Policy," Boston College Working Papers in Economics 627, Boston College Department of Economics.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
  15. Glazer, Amihai & Niskanen, Esko, 1992. "Parking fees and congestion," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 123-132, March.
  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. 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.
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