The Political Economy of Pricing Car Access to Downtown Commercial Districts

Bruno De Borger and Antonio Russo

No 5294, CESifo Working Paper Series from CESifo

Abstract: We study the political economy of pricing access to downtown commercial districts, using parking fees as the main example. A spatial equilibrium model is embedded in a political economy framework in which special interest groups (urban and suburban retailers, local residents) lobby the city government. We have the following results. If downtown and suburban stores sell a homogeneous good, the local government underprices downtown parking if suburban stores sell at small enough margins compared to traditional downtown retailers. If goods are heterogeneous and some consumers engage in multiple-stop shopping (i.e., shop both downtown and in the suburbs), suburban stores will not lobby at all; lobbying by downtown retailers leads to parking fees below the social optimum. Furthermore, local residents do not necessarily lobby for high parking fees on downtown shoppers. If a decline in urban stores leads to negative externalities (urban blight) they may join forces with downtown retailers and lobby against high parking fees on shoppers.

Keywords: parking fees; lobbying; retailers; multiple-stop shopping (search for similar items in EconPapers)
JEL-codes: D43 D72 H23 R41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The political economy of pricing car access to downtown commercial districts (2017)
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