The Time Dimension of Parking Economics
39 Pages Posted: 16 Jan 2015
Date Written: December 29, 2014
A model of demand for parking, evolving over time, is proposed. The model features both extensive (whether to park) and intensive (for how long to park) margins of parking demand, allows multidimensional heterogeneity of parkers, and evolution of demand throughout the day. I calculate the optimal price for parking and show that it is different from all existing pricing methods. I show that the primary purpose of pricing is to regulate departures, rather than arrivals, of parkers. I also find that asymmetric information about parkers' characteristics does not prevent the parking authority from achieving the social optimum. A numerical example compares the optimal policy against the alternatives.
Keywords: Demand for parking, Endogenous duration of parking, Optimal pricing
JEL Classification: H42, R41, R48
Suggested Citation: Suggested Citation