IDEAS home Printed from https://ideas.repec.org/p/ete/etewps/ete0202.html
   My bibliography  Save this paper

Regulating on-street parking

Author

Listed:
  • Edward Calthrop

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

  • Stef Proost

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

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.

Suggested Citation

  • Edward Calthrop & Stef Proost, 2002. "Regulating on-street parking," Energy, Transport and Environment Working Papers Series ete0202, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
  • Handle: RePEc:ete:etewps:ete0202
    as

    Download full text from publisher

    File URL: http://feb.kuleuven.be/drc/Economics/misc/ete_workingpapers/ete-wp02-02.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carl Davidson & Raymond Deneckere, 1986. "Long-Run Competition in Capacity, Short-Run Competition in Price, and the Cournot Model," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 404-415, Autumn.
    2. Anderson, Simon P. & de Palma, Andre, 2004. "The economics of pricing parking," Journal of Urban Economics, Elsevier, vol. 55(1), pages 1-20, January.
    3. Calthrop, Edward & Proost, Stef, 2006. "Regulating on-street parking," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 29-48, January.
    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. Arnott, Richard & Rowse, John, 1999. "Modeling Parking," Journal of Urban Economics, Elsevier, vol. 45(1), pages 97-124, January.
    6. Sundaram,Rangarajan K., 1996. "A First Course in Optimization Theory," Cambridge Books, Cambridge University Press, number 9780521497701, December.
    7. Glazer, Amihai & Niskanen, Esko, 1992. "Parking fees and congestion," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 123-132, March.
    8. Sundaram,Rangarajan K., 1996. "A First Course in Optimization Theory," Cambridge Books, Cambridge University Press, number 9780521497190, December.
    9. Guesnerie, Roger & Roberts, Kevin, 1984. "Effective Policy Tools and Quantity Controls," Econometrica, Econometric Society, vol. 52(1), pages 59-86, January.
    10. Verhoef, Erik & Nijkamp, Peter & Rietveld, Piet, 1995. "The economics of regulatory parking policies: The (IM)possibilities of parking policies in traffic regulation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 29(2), pages 141-156, March.
    11. De Vany, Arthur S & Saving, Thomas R, 1977. "Product Quality, Uncertainty, and Regulation: The Trucking Industry," American Economic Review, American Economic Association, vol. 67(4), pages 583-594, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    parking; transport pricing; publicly provided goods;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ete:etewps:ete0202. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB). General contact details of provider: http://edirc.repec.org/data/etkulbe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.