Regulating on-street parking - evidence from Danish data

Around the world, cities use a range of types of policy to organize the parking market, e.g. physical planning, parking fees, restrictions on the maximum duration for on-street parking, introduction of parking permits, etc. This paper deals with the parking pricing. A small but rapidly growing scientific literature analyzes parking. The economic literature has gathered around the idea that parking should be priced at its opportunity cost, just like any other commodity. Small and Verhoef (2007) point to the fact that parking is underpriced in many urban areas. The main consequence of underpricing is cruising for parking and cruising for parking is a pure loss from the perspective of the society (Shoup, 2005; Calthrop and Proost, 2006). This problem is actually so large that Arnott and Inci (2006) finds that cruising for parking should optimally be eliminated. This is in the first best situation done by setting the parking fee large enough to eliminate cruising for parking without having excess supply of parking spaces, and in the 1 Most research available on parking policy is concerned with the effects on travel behaviour, on the optimal pricing of parking, or on the cost and benefits of parking policy (Van Ommeren et al., 2012; Chu, 2011; Barter, 2010; McCahill and Garric, 2010; Arnott and Inci, 2006).