An Empirical Study on the Elasticity of Car Demand for Changes in Parking Registration Costs: For Apartment Houses in a New Town of Gimhae, South Korea

Abstract

The purpose of this study is to explore the impact of changes in parking fee policy on residents' willingness to own a car, based on a survey of Yulha in Gimhae, South Korea, a representative new town with a relatively high rate of car use due to lack of public transportation. This study, using parking demand function, analysed the response of car ownership intention to parking cost and examined social cost and deadweight loss according to the change in parking fee and its policy effect. The results of the analysis found that the elasticity of demand for parking fees was 6.7 times higher in the case of the intention to give up the purchase of an additional car (0.043) compared to the intention to abandon the operation of the existing car (0.288). The marginal increase rate was 200% in Yulha New Town. The results suggested that it would be desirable to raise the parking registration cost up to three times higher than the current level, from the point of view of society as a whole. In other words, the additional burden on service beneficiaries for the purpose of increasing social welfare was found to be sufficiently acceptable in terms of social systems optimization.