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Regulating urban parking space: the choice between meter fees and time restrictions


  • Edward Calthrop

    () (K.U.Leuven, C.E.S., Energy, Transport and Environment)

  • Stef Proost

    () (K.U.Leuven, C.E.S., Energy, Transport and Environment)


On-street urban parking spaces are typically regulated by either a meter fee or a time restriction. This paper shows that, when the off-street parking market is perfectly competitive, meter fees are more efficient than time restrictions. When on-street parking is free, albeit subject to a time restriction, too many drivers choose to engage in socially wasteful searching for on-street spaces. In contrast, with a meter fee, the relative benefit of parking on-street is reduced, and total search costs can be minimised. A linear meter fee structure is shown to be optimal. A simple policy prescription is also proposed. Set on-street meter fees equal to off- street parking fees. Finally, a simple numerical model calibrated to central London suggests that the use of optimal meter fees increases parking welfare by around 5 per cent over an optimal time restriction.

Suggested Citation

  • Edward Calthrop & Stef Proost, 2000. "Regulating urban parking space: the choice between meter fees and time restrictions," Energy, Transport and Environment Working Papers Series ete0006, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
  • Handle: RePEc:ete:etewps:ete0006

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    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

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