Social costs of on-street parking
The social costs of on-street parking: searching, policy and unpriced externalities
We introduce a methodology to estimate the marginal external costs of parking by extending the theoretical model introduced by Zakharenko (2016), which allows for endogenous parking durations.
External parking costs
External parking costs encompass both additional in-vehicle search and walking time costs incurred by arriving motorists.
We show that the unpriced marginal externality is the key metric that parking authorities should use to inform their parking policies. We apply this methodology to the city centre of Melbourne, where strict time limits are combined with on-street parking prices that are below short-term off-street parking prices.
Using parking externalities for parking policies
We demonstrate that generally parking externalities are low and far below their optimum, so relaxing many of the current parking time limits will increase welfare.
Alternatively, on Sundays in many areas parking externalities are high while parking is free, so introducing paid parking will also increase welfare.
Similarly on weekdays and Saturdays late in the evening just before restrictions end parking externalities are high, and so extending their hours of operation will also improve welfare.