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Free Parking For All In Shopping Malls

Author

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  • Kevin Hasker
  • Eren Inci

Abstract

We show why a mall provides parking for free and embed the parking costs in the prices of the goods. Essentially, charging a parking fee to risk‐averse customers means penalizing them for not finding their desired good. This result holds whether the mall has monopoly power or prices competitively, if there is parking validation, and if there is a trade‐off between shopping and parking spaces. It is also the attainable social optimum. The equilibrium lot size is too small, yielding a rationale for minimum parking requirements. However, parking fees may be positive and lots may be too large in urban malls.

Suggested Citation

  • 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(4), pages 1281-1304, November.
    • Handle: RePEc:wly:iecrev:v:55:y:2014:i:4:p:1281-1304
    DOI: 10.1111/iere.12090
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    Cited by:

    1. Gokhan Guven & Eren Inci & Antonio Russo, 2022. "Competition, Concentration and Percentage Rent in Retail Leasing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(2), pages 401-430, June.
    2. Tscharaktschiew, Stefan & Reimann, Felix, 2021. "On employer-paid parking and parking (cash-out) policy: A formal synthesis of different perspectives," Transport Policy, Elsevier, vol. 110(C), pages 499-516.
    3. 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.
    4. van Ommeren, Jos & Russo, Giovanni, 2014. "Time-varying parking prices," Economics of Transportation, Elsevier, vol. 3(2), pages 166-174.
    5. 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.
    6. Arnott, Richard & Inci, Eren & Rowse, John, 2015. "Downtown curbside parking capacity," Journal of Urban Economics, Elsevier, vol. 86(C), pages 83-97.
    7. Ding, Yanyan & Jian, Sisi, 2022. "Strategic collaboration between land owners and charging station operators: Lease or outsource?," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 183-211.
    8. Arnott, Richard & Inci, Eren & Rowse, John, 2011. "Downtown Parking and Traffic Congestion: A Diagrammatic Exposition," University of California Transportation Center, Working Papers qt4sb0975r, University of California Transportation Center.

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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly

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