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Drivers' willingness to pay for curb parking (rather than in a garage)

  • Martijn Kobus

    ()

  • Eva Gutiérrez-i-Puigarnau
  • Piet Rietveld

    ()

  • Jos Van Ommeren

    ()

Although the growing economics of parking literature almost exclusively focuses on the drivers' choice between curb and garage parking (and the consequences of non-optimal pricing), we are not aware of a substantial literature of revealed-preference studies which examines this choice. As a result, we currently have little or no knowledge to what extent differences between on-street and garage parking prices affect this choice. We introduce and apply an easy-to-implement methodology to estimate drivers’ willingness to pay for curb parking (relative to garage parking), using information from administrative data about parking choice and parking duration for one particular city. This kind of administrative data is widely available in many other cities around the world. So, one of the advantages of our methodology is that it easily be reapplied in other cities. In essence, we estimate the effect of parking prices on parking choice (i.e. street or garage), given information about parking durations. Our methodology is based on the observation that the differences in prices for on-street and garage parking depends on parking duration. So, conditional on (anticipated) parking duration, drivers face different pricing schemes. The endogeneity of parking duration is acknowledged in the estimation procedure. We show that drivers’ willingness to pay for curb parking (relative to garage parking) is positive and about € 0.35 - 0.58. When we assume a car drivers’ value of time of € 5.00 per hour, our results imply that drivers save about 4 - 7 minutes when parking on-street. This seems a reasonable result. Our results also imply that car drivers are rather sensitive to small price differences between street and garage parking, which makes sense as both are close substitutes. For example, if curb parking were only 33 percent cheaper than garage parking, the on-street stock of cars would increase threefold. Our estimates strongly suggest that a parking regime including curb prices that are (slightly) higher than garage prices is welfare improving, in particular because drivers with longer parking durations are induced to use garage parking. Key-words: Curb parking, garage parking, parking policy. JEL code: R41

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa12p753.

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Date of creation: Oct 2012
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Handle: RePEc:wiw:wiwrsa:ersa12p753
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  1. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
  2. 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.
  3. Arnott, Richard & Rowse, John, 2009. "Downtown parking in auto city," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 1-14, January.
  4. 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.
  5. Richard Arnott & Eren Inci, 2005. "An Integrated Model of Downtown Parking and Traffic Congestion," NBER Working Papers 11118, National Bureau of Economic Research, Inc.
  6. 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.
  7. Arnott, Richard, 2006. "Spatial competition between parking garages and downtown parking policy," Transport Policy, Elsevier, vol. 13(6), pages 458-469, November.
  8. 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.
  9. 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.
  10. 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, pages 1281-1304, November.
  11. 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.
  12. Richard Arnott, 1990. "A Temporal and Spatial Equilibrium Analysis of Commuter Parking," Discussion Papers 884, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  13. Glazer, Amihai & Niskanen, Esko, 1992. "Parking fees and congestion," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 123-132, March.
  14. 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.
  15. Shoup, Donald C., 2006. "Cruising for parking," Transport Policy, Elsevier, vol. 13(6), pages 479-486, November.
  16. Shoup, Donald C., 2006. "Cruising for Parking," University of California Transportation Center, Working Papers qt55s7079f, University of California Transportation Center.
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