Abstract
We examine the effect of citywide parking policy on parking and traffic demand. Using a large increase in on-street parking prices for the city of Amsterdam, we show that the policy caused a substantial drop in on-street parking demand, which is not offset by an increase in off-street demand. The overall reduction in parking demand implies a 2% – 3% reduction in traffic, which is confirmed with traffic flow data. The decline in traffic is larger during the evening peak, which indicates that parking prices are effective in reducing congestion in the evening peak but less so in the morning peak.
Highlights
Parking prices are a widely accepted policy tool to manage parking and traffic demand in cities
We provide novel evidence on the effect of parking policy on citywide parking demand and traffic flow
Our findings show that overall on-street parking demand fell by around 17%, while the combined demand for the entire hourly parking market declined by 14%
Summary
Parking prices are a widely accepted policy tool to manage parking and traffic demand in cities. The theoretical economic literature has extensively studied parking policy as a second-best alternative to tackle traffic externalities by reducing the number of car trips in urban areas.. In light of the technical and political challenges of implementing road pricing, parking policies have come under renewed interest because they already exist in many cities and extending these policies may be more feasible (Small and Verhoef, 2007). The empirical literature has yet to confirm or refute the effectiveness of parking prices in reducing traffic demand. We aim to fill this gap by examining to what extent hourly on-street parking prices are an effective second-best policy tool to mitigate urban traffic externalities by reducing citywide road traffic. We use information on on-street parking, off-street parking, and traffic flow for a period during which on-street parking prices were suddenly and strongly increased throughout the city
Published Version
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