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Parking Policies and Road Pricing


  • Edward Calthrop

    (Centre for Economic Studies, Katholieke Universiteit Leuven, Naamsestraat 69, B3000 Leuven, Belgium,

  • Stef Proost

    (Centre for Economic Studies, Katholieke Universiteit Leuven, Naamsestraat 69, B3000 Leuven, Belgium, Stef.Proost@

  • Kurt van Dender

    (Centre for Economic Studies, Katholieke Universiteit Leuven, Naamsestraat 69, B3000 Leuven, Belgium,


There are two main sources of inefficiency in urban transport markets. First, transport prices fail to reflect the external costs of travel, notably peak-period external congestion costs. Secondly, a large percentage of drivers park for free, particularly at the workplace. Economic theory suggests, in the absence of other market distortions, that efficiency can be restored with a perfectly differentiated external cost charge in conjunction with resource-cost pricing of all parking spots. In practice, urban transport authorities can try various combinations of imperfect road-pricing systems and imperfect parking charges. One example might be the use of a single cordon charge to enter a city, together with a tax on workplace parking. In this paper, we use a numerical simulation model of an urban transport market to examine the efficiency gains from various parking policies with and without a simple cordon system. As would be expected, we show that pricing of parking and road use need to be simultaneously determined. As the level of the parking fee becomes more efficient, or as the number of free parkers is reduced, so the level of optimally determined cordon charge falls. Additionally, by introducing a cordon charge, the level of the optimally determined parking fee falls. The model results show that the second-best pricing of all parking spaces produces higher welfare gains than the use of a single-ring cordon scheme, though marginally lower than the combination of a cordon charge with resource-cost pricing of parking spots.

Suggested Citation

  • Edward Calthrop & Stef Proost & Kurt van Dender, 2000. "Parking Policies and Road Pricing," Urban Studies, Urban Studies Journal Limited, vol. 37(1), pages 63-76, January.
  • Handle: RePEc:sae:urbstu:v:37:y:2000:i:1:p:63-76

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    Cited by:

    1. Bruno De Borger & Bart Wuyts, 2009. "Commuting, Transport Tax Reform and the Labour Market: Employer-paid Parking and the Relative Efficiency of Revenue Recycling Instruments," Urban Studies, Urban Studies Journal Limited, vol. 46(1), pages 213-233, January.
    2. Hirte, Georg & Tscharaktschiew, Stefan, 2018. "The impact of anti-congestion policies and the role of labor-supply margins," CEPIE Working Papers 04/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    3. Francis Ostermeijer & Hans Koster & Jos van Ommeren, "undated". "Residential parking costs and car ownership: Implications for parking policy and automated vehicles," Tinbergen Institute Discussion Papers 19-020/VIII, Tinbergen Institute.
    4. Azevedo, Isabel & Delarue, Erik & Meeus, Leonardo, 2013. "Mobilizing cities towards a low-carbon future: Tambourines, carrots and sticks," Energy Policy, Elsevier, vol. 61(C), pages 894-900.
    5. Teresa Palmer Tous & Antoni Riera Font, 2005. "Road transport taxation: a critical review of their internalising effectiveness," Hacienda Pública Española, IEF, vol. 173(2), pages 165-191, June.
    6. repec:eee:transa:v:113:y:2018:i:c:p:369-380 is not listed on IDEAS
    7. repec:eee:juecon:v:104:y:2018:i:c:p:35-46 is not listed on IDEAS
    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. repec:gam:jsusta:v:8:y:2016:i:2:p:164:d:63715 is not listed on IDEAS
    10. Shengyuan Zhang & Jimin Zhao, 2016. "Low-Carbon Futures for Shenzhen’s Urban Passenger Transport System," HKUST IEMS Working Paper Series 2016-33, HKUST Institute for Emerging Market Studies, revised Jun 2016.
    11. Fosgerau, Mogens & de Palma, André, 2013. "The dynamics of urban traffic congestion and the price of parking," Journal of Public Economics, Elsevier, vol. 105(C), pages 106-115.
    12. Richard Arnott, 2001. "The Economic Theory of Urban Traffic Congestion: A Microscopic Research Agenda," Boston College Working Papers in Economics 502, Boston College Department of Economics.
    13. Geroliminis, Nikolaos, 2007. "Increasing mobility in cities by controlling overcrowding," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt5wg9j6z7, Institute of Transportation Studies, UC Berkeley.
    14. Cats, Oded & Zhang, Chen & Nissan, Albania, 2016. "Survey methodology for measuring parking occupancy: Impacts of an on-street parking pricing scheme in an urban center," Transport Policy, Elsevier, vol. 47(C), pages 55-63.
    15. Marsden, Greg, 2006. "The evidence base for parking policies--a review," Transport Policy, Elsevier, vol. 13(6), pages 447-457, November.
    16. repec:eee:regeco:v:73:y:2018:i:c:p:217-236 is not listed on IDEAS
    17. Tikoudis, Ioannis & Verhoef, Erik T. & van Ommeren, Jos N., 2015. "On revenue recycling and the welfare effects of second-best congestion pricing in a monocentric city," Journal of Urban Economics, Elsevier, vol. 89(C), pages 32-47.
    18. 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.
    19. Edward Calthrop, 2001. "On Subsidising Auto-Commuting," CESifo Working Paper Series 566, CESifo Group Munich.
    20. Fosgerau, Mogens & de Palma, André, 2013. "The dynamics of urban traffic congestion and the price of parking�," MPRA Paper 48433, University Library of Munich, Germany.
    21. Frederick Guy, 2013. "Small, Local and Cheap? Walkable and Car-oriented Retail in Competition," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(4), pages 425-442, February.
    22. Button, Kenneth, 2004. "1. The Rationale For Road Pricing: Standard Theory And Latest Advances," Research in Transportation Economics, Elsevier, vol. 9(1), pages 3-25, January.
    23. repec:eee:transa:v:128:y:2019:i:c:p:46-58 is not listed on IDEAS
    24. repec:eee:jotrge:v:49:y:2015:i:c:p:1-8 is not listed on IDEAS
    25. Juan Li & Jing Ye & Qinglian He & Chunfu Shao, 2016. "A Novel Scheme to Relieve Parking Pressure at Tourist Attractions on Holidays," Sustainability, MDPI, Open Access Journal, vol. 8(2), pages 1-11, February.

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