Regulating Urban Parking Space: the Choice between Meter Fees and Time Restrictions

Edward Calthrop and Stef Proost

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: On-street urban parking spaces are typically regulated by either a meter fee or a time restriction. This paper shows that, when the off-street parking market is perfectly competitive, meter fees are more efficient than time restrictions. When on-street parking is free, albeit subject to a time restriction, too many drivers choose to engage in socially wasteful searching for on-street spaces. In contrast, with a meter fee, the relative benefit of parking on-street is reduced, and total search can be minimised. A linear meter fee structure is shown to be optimal. A simple policy prescription is also proposed. Set on-street meter fees equal to off-street parking fees. Finally, a simple numerical model calibrated to central London suggests that the use of optimal meter fees increases parking welfare vy around 5% over an optimal time restriction.

Date: 2000-03
New Economics Papers: this item is included in nep-reg and nep-ure
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Working Paper: Regulating urban parking space: the choice between meter fees and time restrictions (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces0021

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