Monday, January 30, 2012


I always knew that parking is a sexy topic*, but it takes a first rate journalist like Leon Neyfakh at the Boston Globe to explain clearly the kinds of things that excite economists: The case for the $6 parking meter

"For many people, what’s disconcerting about demand-based parking is the same thing that excites economists: It introduces market forces to an aspect of public life that historically has been largely protected from them. Like highway tolls that go up during rush hour, or the “congestion fees” some crowded cities have imposed, the Shoup model of street parking is part of a broader conversation about the trade-off between efficiency and equal access — and about what aspects of our lives should be treated as commodities as opposed to inalienable civic resources."

The late Clark Kerr on the subject: "The three purposes of the University?--To provide sex for the students, sports for the alumni, and parking for the faculty."


dWj said...

Driving in the city is my second least favorite activity, beat only by driving around looking for parking in the city. The price I'm willing to pay to avoid that is finite but positive.

Highgamma said...

I think one of the issues that concerns people is the one that economists have the language for but never discuss. The municipality is often the only, or one of the few, providers of parking. Once a municipality begins to charge for market prices for parking, they will also realize that they can charge MORE for parking. That is, they can take advantage of their monopoly status and charge the monopoly (or oligopoly) price for a parking space.
The large transfer from parkers to municipal coffers is clearly understood by the masses. It is the inevitable outcome of a market-based policy when politicians are self-interested. I always wonder why this eludes the "enthusiastic" economists.

Unknown said...

There are a couple of key elements that always get left out of the Shoup-ian analysis:
1) Generally, the people who spend most of the time thinking and writing about parking, ironically, hate cars. I have yet to determine whether it's subconscious and passive-aggressive, or conscious and fully cynical, but the dialogue is rarely rational for this reason.
2) In all but the densest urban areas, there are attractive commercial alternatives a few minutes' drive away, with FREE parking. Many businesses fail in the heart of mid-size cities because the parking schemes are modeled after Cambridge, MA (or Manhattan) when those are not rational comparisons. Elasticities, in other words, have been miscalculated, ignoring the impact of the dreaded mall.

Anonymous said...

@Professor Tex:
1) Maybe it's not irony, but causation. Maybe spending time thinking and writing about parking leads one to realize how inefficient a transportation monoculture is.
2) No one is proposing we severely and unilaterally raise urban parking prices. Basing prices on demand will promote optimal utilization of the parking that is available. Just because prices could be too high does not mean that the current prices are not too low.

Jacob said...

Highgamma (who is worried about monopoly pricing of parking by municipalities):


First, I find it to be a frustratingly cynical approach to government to assume that money that goes into local municipal coffers "disappears." That money could go directly back to the citizens in the form of either tax breaks or better upkeep for local streets and sidewalks. Shoup argues for the latter; I'm sympathetic to either.

In the standard municipal approach, everyone else subsidizes parkers. The large expense of constructing (subsidized) parking spots leads to higher prices and higher rents. Furthermore, Shoup is careful to show that in the current setup, even parkers are worse off! This is due in large part to congestion externalities caused by many drivers circling around for a (subsidized) streetside parking spot.

Second, municipalities are not a monopoly in the classical sense -- if you have a car, you can almost always drive somewhere else to shop. Cities would be irrational to price parking so high that nobody goes there anymore. They certainly have an incentive to maximize profits, but they do not have monopoly pricing power. (This also addresses Tex's second point above.)

Third, even if municipalities did ban private parking garages, there are almost always other options to get to these locations. (This is generally true in places that could support priced parking at all -- in other words, congested areas. Pricing street parking obviously makes no sense in the land of big boxes and strip malls.) Municipalities adopting new parking regulations are frequently doing so in recognition of the fact that underpriced parking helps to destroy those alternative transportation options in a vicious cycle.