IDEAS home Printed from https://ideas.repec.org/p/idb/brikps/7290.html
   My bibliography  Save this paper

Parking Taxes as a Second Best Congestion Pricing Mechanism

Author

Listed:
  • Wilson, Riley
  • Miller, Sebastián J.

Abstract

Growing vehicle use and congestion externalities have led many to consider alternative congestion pricing mechanisms, as road pricing often has high infrastructural costs and faces public opposition. This paper explores the role of parking taxation in reducing congestion by considering a natural experiment created by the progressive January 1, 2012 Chicago parking tax increase. Exploiting differences in vehicle use across income groups, it is estimated that the approximately $2 a day parking tax increase led to a 4-6 percent reduction in total vehicle trips in high-income areas, with the largest response seen on roads more heavily used by commuters. Also found are corresponding increases in use of public transit and a 3. 1 percent aggregate reduction in vehicle trips. It is concluded that parking taxes can help mitigate congestion externalities, although they are no more than about half as effective as more efficient congestion tolls.

Suggested Citation

  • Wilson, Riley & Miller, Sebastián J., 2015. "Parking Taxes as a Second Best Congestion Pricing Mechanism," IDB Publications (Working Papers) 7290, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:7290
    DOI: https://doi.org/10.18235/0000205
    as

    Download full text from publisher

    File URL: https://publications.iadb.org/publications/english/document/Parking-Taxes-as-a-Second-Best-Congestion-Pricing-Mechanism.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.18235/0000205?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arnott, Richard, 2006. "Spatial competition between parking garages and downtown parking policy," Transport Policy, Elsevier, vol. 13(6), pages 458-469, November.
    2. Arnott, Richard & Inci, Eren, 2006. "An integrated model of downtown parking and traffic congestion," Journal of Urban Economics, Elsevier, vol. 60(3), pages 418-442, November.
    3. Anderson, Simon P. & de Palma, Andre, 2004. "The economics of pricing parking," Journal of Urban Economics, Elsevier, vol. 55(1), pages 1-20, January.
    4. Hensher, David A. & King, Jenny, 2001. "Parking demand and responsiveness to supply, pricing and location in the Sydney central business district," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(3), pages 177-196, March.
    5. Gilles Duranton & Matthew A. Turner, 2011. "The Fundamental Law of Road Congestion: Evidence from US Cities," American Economic Review, American Economic Association, vol. 101(6), pages 2616-2652, October.
    6. de Palma, André & Lindsey, Robin & Niskanen, Esko, 2006. "Policy insights from the urban road pricing case studies," Transport Policy, Elsevier, vol. 13(2), pages 149-161, March.
    7. Alex Anas & Robin Lindsey, 2011. "Reducing Urban Road Transportation Externalities: Road Pricing in Theory and in Practice," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 66-88, Winter.
    8. Ian W. H. Parry & Margaret Walls & Winston Harrington, 2007. "Automobile Externalities and Policies," Journal of Economic Literature, American Economic Association, vol. 45(2), pages 373-399, June.
    9. Arnott, Richard & Rowse, John, 2009. "Downtown parking in auto city," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 1-14, January.
    10. Tsamboulas, Dimitrios A., 2001. "Parking fare thresholds: a policy tool," Transport Policy, Elsevier, vol. 8(2), pages 115-124, April.
    11. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
    12. Daunfeldt, Sven-Olov & Rudholm, Niklas & Rämme, Ulf, 2009. "Congestion charges and retail revenues: Results from the Stockholm road pricing trial," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(3), pages 306-309, March.
    13. Inci, Eren, 2015. "A review of the economics of parking," Economics of Transportation, Elsevier, vol. 4(1), pages 50-63.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Handy, Susan L & Volker, Jamey M. B. & Hosseinzade, Reyhane, 2024. "Assessing the Effectiveness of Potential Vehicle-Miles-Traveled (VMT) Mitigation Measures," Institute of Transportation Studies, Working Paper Series qt1pf307sp, Institute of Transportation Studies, UC Davis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Riley Wilson & Sebastián J. Miller, 2015. "Parking Taxes as a Second Best Congestion Pricing Mechanism," IDB Publications (Working Papers) 91742, Inter-American Development Bank.
    2. Caicedo, Felix & Diaz, Alejandra, 2013. "Case analysis of simultaneous concessions of parking meters and underground parking facilities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 358-378.
    3. Gallo, Mariano & D'Acierno, Luca & Montella, Bruno, 2011. "A multilayer model to simulate cruising for parking in urban areas," Transport Policy, Elsevier, vol. 18(5), pages 735-744, September.
    4. Tscharaktschiew, Stefan & Reimann, Felix, 2021. "On employer-paid parking and parking (cash-out) policy: A formal synthesis of different perspectives," Transport Policy, Elsevier, vol. 110(C), pages 499-516.
    5. Inci, Eren & Lindsey, Robin, 2015. "Garage and curbside parking competition with search congestion," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 49-59.
    6. Evangelinos, Christos & Tscharaktschiew, Stefan & Marcucci, Edoardo & Gatta, Valerio, 2018. "Pricing workplace parking via cash-out: Effects on modal choice and implications for transport policy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 369-380.
    7. Krishnamurthy, Chandra Kiran B. & Ngo, Nicole S., 2020. "The effects of smart-parking on transit and traffic: Evidence from SFpark," Journal of Environmental Economics and Management, Elsevier, vol. 99(C).
    8. Inci, Eren, 2015. "A review of the economics of parking," Economics of Transportation, Elsevier, vol. 4(1), pages 50-63.
    9. Kobus, Martijn B.W. & Gutiérrez-i-Puigarnau, Eva & Rietveld, Piet & Van Ommeren, Jos N., 2013. "The on-street parking premium and car drivers' choice between street and garage parking," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 395-403.
    10. Eren Inci & Jos van Ommeren & Martijn Kobus, 2017. "The external cruising costs of parking," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1301-1323.
    11. Jesper de Groote & Jos van Ommeren & Hans R. A. Koster, 2018. "The Impact of Parking Policy on House Prices," Journal of Transport Economics and Policy, University of Bath, vol. 52(3), pages 267-26-282.
    12. De Borger, Bruno & Russo, Antonio, 2017. "The political economy of pricing car access to downtown commercial districts," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 76-93.
    13. Lehner, Stephan & Peer, Stefanie, 2019. "The price elasticity of parking: A meta-analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 177-191.
    14. Semeneh Hunachew Bayih & Surafel Luleseged Tilahun, 2024. "Dynamic vehicle parking pricing. A review," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 34(1), pages 35-59.
    15. Geva, Sharon & Fulman, Nir & Ben-Elia, Eran, 2022. "Getting the prices right: Drivers' cruising choices in a serious parking game," Transportation Research Part A: Policy and Practice, Elsevier, vol. 165(C), pages 54-75.
    16. Ben-Dor, Golan & Ogulenko, Aleksey & Klein, Ido & Ben-Elia, Eran & Benenson, Itzhak, 2024. "Simulation-based policy evaluation of monetary car driving disincentives in Jerusalem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 183(C).
    17. Lu, Xiao-Shan & Guo, Ren-Yong & Huang, Hai-Jun & Xu, Xiaoming & Chen, Jiajia, 2021. "Equilibrium analysis of parking for integrated daily commuting," Research in Transportation Economics, Elsevier, vol. 90(C).
    18. Liu, Wei & Geroliminis, Nikolas, 2016. "Modeling the morning commute for urban networks with cruising-for-parking: An MFD approach," Transportation Research Part B: Methodological, Elsevier, vol. 93(PA), pages 470-494.
    19. Lu, Xiao-Shan & Huang, Hai-Jun & Guo, Ren-Yong & Xiong, Fen, 2021. "Linear location-dependent parking fees and integrated daily commuting patterns with late arrival and early departure in a linear city," Transportation Research Part B: Methodological, Elsevier, vol. 150(C), pages 293-322.
    20. van Ommeren, Jos & de Groote, Jesper & Mingardo, Giuliano, 2014. "Residential parking permits and parking supply," Regional Science and Urban Economics, Elsevier, vol. 45(C), pages 33-44.

    More about this item

    Keywords

    IDB-WP-614; Congestion; Second-best pricing; Traffic; Parking; Parking tax; Parking demand;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idb:brikps:7290. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Felipe Herrera Library (email available below). General contact details of provider: https://edirc.repec.org/data/iadbbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.