Estimating the price elasticity of demand for off-street parking in Hiroshima City, Japan

Hajime Seya, Taiki Asaoka, Makoto Chikaraishi and Kay W. Axhausen

Transportation Research Part A: Policy and Practice, 2024, vol. 183, issue C

Abstract: Existing evidence suggests that the demand for parking is inelastic. This study investigates the price elasticity of parking demand in the Japanese coin-parking market, which is characterized by near-free-market conditions. A field survey of parking prices and demand in an approximately 8 km2 area in the center of Hiroshima City was conducted. The prices per 10 min were collected from 949 parking lots, and occupancy rates were observed for 133 parking lots from afternoon to evening. The estimation results, using a Heckman-type sample selection model with instrumental variables, reveal that price elasticity ranged from –1.683 to –0.9971, which is higher than the estimates of previous studies in terms of absolute value. This difference can be attributed to the characteristics of the target area where alternative parking spaces and transportation options are readily available. Our results also indicate that parking operation companies have difficulty raising price in areas with high parking density due to competition, resulting in the increase in the attractiveness of automobiles relative to public transportation. Parking price would need to be controlled to manage urban traffic.

Keywords: Coin parking; Price elasticity of demand; Sample selection; Instrumental variables (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1016/j.tra.2024.104051

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