Free Parking for All in Shopping Malls
February 10, 2012
Sabancı University Working Paper No. 2010/0004
We show why a shopping mall prefers to provide parking for free and embed the parking costs in the prices of the goods. This holds if the mall has monopoly power or prices competitively; if there is parking validation or a trade-off between shopping and parking spaces. It is also the second-best social optimum. Generally, the equilibrium lot size is too small, yielding a rationale for minimum parking requirements. In urban malls, parking fees may be positive because individuals can use the lot without intending to shop, and lots may become too large because of the trade-off between shopping and parking spaces.
Number of Pages in PDF File: 47
Keywords: land use, lot size, parking fee, parking requirements, shopping mall
JEL Classification: D42, H21, L91, R41, R52
Date posted: February 11, 2012
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