“The influence of paid parking on congestion in an urban environment”

By: R.H. van den Berg

Stn. 350081

Erasmus University Rotterdam, 2014

For most people, the car is considered a piece of freedom, the car provides you with a way to go wherever you want whenever you want. This belief is what makes people addicted to their cars, even in situations where driving is beyond rational, people keep on driving their cars. In large urban areas, driving a car can be a hassle due to heavy congestion and parking problems. Both congestion and parking problems are harmful to society, as they produce a loss in time and money, also they add to pollution and environmental problems. The problem of congestion tends to get worse, as the amount of traffic still increases, the peaks get higher and last longer, and travel predictability decreases. To stop this trend research has to be conducted in order to find out what causes it, and how the increase of congestion can be put to a halt. One possible solution to reduce the amount of congestion is by a system of paid parking. It is believed that the payment for a parking spot influences the amount of congestion. By providing an overview of existing literature, the aim is to determine the influence, paid parking has on congestion. The focus lies upon an urban environment.

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1.INTRODUCTION 3

2. CONGESTION 4

2.1 DEFINING CONGESTION 42.2 THE PROBLEM OF CONGESTION 52.3 TYPES OF CONGESTION 52.4 CAUSES 62.5 SOLUTIONS 8

3. PARKING 10

3.1 WHY IS PARKING OFTEN PAID? 113.2 BASIC ECONOMICS 113.3 PARKING FACILITIES 12ON-STREET PARKING 12OFF-STREET PARKING 13PUBLIC VS. PRIVATE 143.4 GOVERNMENTAL AND LOCAL MUNICIPAL INTERVENTION 14TOOLS OF THE GOVERNMENT 16

4. THE INFLUENCE OF PAID PARKING ON CONGESTION 18

4.1 FEWER CARS IN THE CITY 194.2 CRUISING FOR PARKING 20MODELLING CRUISING 20THE CAUSE AND EFFECT OF CRUISING 214.3 DOUBLE DIVIDEND EFFECT 22

5. CONCLUSION AND DISCUSSION 23

BIBLIOGRAPHY 25

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1.Introduction

For most people, the car is considered a piece of freedom, the car provides you with a way to go wherever you want whenever you want. This belief is what makes people addicted to their cars, even in situations where driving is beyond rational, people keep on driving their cars. In large urban areas, driving a car can be a hassle due to heavy congestion and parking problems. Both congestion and parking problems are harmful to society, as they produce a loss in time and money, also they add to pollution and environmental problems. The problem of congestion tends to get worse, as the amount of traffic still increases, the peaks get higher and last longer, and travel predictability decreases (OECD, 2007). To stop this trend research has to be conducted in order to find out what causes it, and how the increase of congestion can be put to a halt. One possible solution to reduce the amount of congestion is by a system of “paid Parking”. It is believed that the payment for a parking spot can influence the amount of congestion. By providing an overview of existing literature, the aim is to determine the influence paid parking has on congestion. The focus lies upon an urban environment. This leads to the research question: “What is the influence of paid parking on congestion in an urban environment?”.

Literature suggests that there are two main factors by which parking should have an effect on congestion. The first works thru the simple theory of supply and demand. An increase in the parking price should decrease the demand for parking, resulting in less traffic in the central city. However an increase in parking tariffs has some distorting effects which makes the theory of supply and demand a bit more complicated. Research by Glazer and Niskanen (1992, p.123) and by Roth and Thomson (1963, p.185) already indicated that a tax on parking can have unwanted effects in the behaviour of parking traffic and other kinds of traffic. So as it appears the influence of an increase in parking tariffs is not as straightforward as you might think. The second factor by which parking influences congestion is cruising for parking. The idea behind this is that when the price of parking increases, the demand for parking decreases. This will lead to a lower occupancy rate of the parking facilities, which allows parkers to freely park their car, without having to drive around, and “cruise” for parking. Cruising for parking constipates the roads, leading to a lot of urban congestion. In parking it is assumed that the price is the determent of whether one cruises or not, but research by Shoup (2006, p.479) and by Ommeren et al.(2012, p.123) suggest that there are more factor determining whether one cruises. This might influence the effect a price increase has on congestion. Research by Kelly and Clinch (2006, p.487) conclude that the purpose of the trip has an effect on the occupancy levels of the parking facilities. This makes you question whether the price is the real tool to intervene in the parking market in order to reduce cruising. So also the influence of paid parking on congestion thru cruising is worth some more examining.

In order to determine the influence of paid parking on congestion, it is important to understand both terms. In the first section, congestion is handled in order to get a broader view of the concept. Next we discuss the economics and specifics of parking. The idea behind the second to last part is to really zoom in on the effects of paid parking on congestion. The two main effects, the effect of cruising and the effect of a decrease in the amount of parkers are investigated, and also some side effects parking has on congestion are looked upon. Evaluating the effects of these factors will results in the final part about the conclusions and remarks.

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2. Congestion

2.1 Defining congestionIn determining the influence of paid parking on congestion the first step is to define congestion. Most drivers of automobiles will probably define congestion as a situation in which they are slowed down by the other traffic, or a situation in which one gets “stuck in traffic” Some will consider traffic being congested, the moment there is a reduction in speed caused by the other vehicles, and others considers the road congested the moment the traffic comes to a near complete halt. The reason that congestion hasn’t got a single definition can be explained because it can be seen as a phenomenon consisting of a physical and a relative component (OECD, 2007). Congestion is a physical phenomenon in the way that vehicles have an impact on each other’s speed and progression when the roads get more occupied. The relative phenomenon relates to the expectation the drivers have on traffic congestion in comparison to the actual traffic circumstances. While the physical component can often be measured, by for instance induction-loops in the road, the relative component remains subjective.

Defining congestion can also be done in a purely theoretical way. The use of roads can be seen as a private good as it is both rivalry and excludable (Mallard & Glaister, 2008). Where one car drives the other can’t drive, or he is affected by the others driving. And cars can be banned from the streets or certain roads by legislation, which makes it excludable. As in all traded goods there is supply and demand, and when there is no equilibrium, inefficient outcomes may occur. Congestion may simply be seen as the consequence of the demand for road usage exceeding the supply of it. With this description, solving the congestion problem would seem to be just a matter of increasing supply or decreasing demand. Indeed often the solution can be found in simple economics but the problem with this theoretical approach is that both the supply and demand can’t be seen as fixed variables. The “supply of road” doesn’t only change by road construction but also by the speed of vehicles, accidents, and even the weather. Demand also varies a great deal every day, week, month and season, depending on time of the day, and again the weather. So there might be sufficient supply but the roads can still be congested, for instance by traffic accidence.

The best alternative to this modelled and oversimplified definition comes from the European Conference of Ministers of Transport (ECMT). In 1999 they came up with a more practical and elaborate definition.

“Congestion is the impedance vehicles impose on each other, due to the speed-flow

relationship, in conditions where the use of a transport system approaches its capacity.”

First of all, this definition describes the effect one vehicle and especially a new vehicle entering the road has on vehicles already making use of the road. This effect consist of the space the vehicle uses and the impact it has on the space of other vehicles. These two factor may cause congestion, but aren’t inherently the cause of congestion. The definition also comprehends with the speed-flow relationship, in which the

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traffic can have different effects on the flow and speed of the traffic, when the roads get near saturation the traffic can either keep flowing or come to a halt.

This definition might be complex but it comes best to gasp the full meaning of “congestion”.

2.2 The problem of congestionCountless research has been conducted, figuring out what kind of congestion exist, what causes it, and mostly how it can be solved. Congestion appears to be a large social problem that needs to be solved. But why is congestion a problem, and to whom? In the textbook of Mallard and Glaister (2008) congestion is conceived as a problem because of four reasons. Congestion produces a loss in time, a loss in energy, it produces pollution, and it can be hold accounted for an increase in accidents. In comparison to a situation where one can freely drive to their destination, congestion cost time. If you end up in congestion, you are longer on your way to a destination. A loss in time is harmful because time has value and getting stuck in traffic thus means a financial loss. When you lose time at a moment you can’t afford to do so, a loss occurs that sometimes can’t be expressed in monetary terms. During the congestion you also burn more fuel than you would if you could just keep on driving. This is an example of the loss in energy that occurs when stuck in traffic. In congested situations you constantly have to apply the brake, and accelerate again. This, in combination with the fact that your engine is running for a longer amount of time, makes congestion a big polluter (Donohue, 1990). Congestion also has an effect on the number of accidents. In a study conducted in California, it was discovered that in a congested situation the chance of an accident is 1.5 times higher per vehicle-mile (Vickrey, 1969).

Now concerning the question, to whom is congestion a problem, the answer is to all of us. Not only the people driving the vehicles are effected by traffic jams, but congestion also reduces the total welfare. Also citizens not driving are affected by the exhaust fumes, and the increased risk in accidents. Plus when congestion has an effect on the total welfare thru the economy, everyone is affected.

2.3 Types of congestionNext to defining congestion it is also important to distinguish the different kinds of congestion as every kind can have a different cause and different consequences. When looking at the effect of paid parking on congestion, it is important to know what kind of congestion it is and if it can be traced back to the parking facilities. There is no limit on the number of congestion types but at least six types can be distinguished in order to describe the kind of congestion, and how the traffic is moving. The six main kinds of congestion are single interaction, multiple interaction, bottleneck situations, trigger neck situations, network and control and general density (Vickrey, 1969). These forms can occurs independently from each other, but in practise they often coexist.

Single interaction is a situation in which two vehicles have an impact on each other’s speed. For instance when two vehicles approach an intersection one has to wait for the other, or slow down in order to avoid a collision. In this case besides the crossing car, the whole street or even town can be empty but that one vehicle still has an impact on the progression and speed of the other vehicle. This can be viewed of as a chief form of congestion.

The multiple interaction situation is a bit more enhanced. These situations occur at higher levels of traffic density. In comparison with the previous example concerning the single interaction situation, there are now multiple vehicles involved at the intersect. First the vehicle who has to stop in order to give

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another vehicle the right of way, is as in the single interaction situation affected in his progress. But in this situation there are also cars not involved in the initial situation, who are indirectly affected by it. For instance because they need to slow down because the car in front of them is still picking up speed, and this in turn has an effect on the person behind him, and the person behind him might see brake lights so also decides to step on the brake, and so forth. In the multiple interaction situation the initial cause has a longer lasting effect on traffic not involved in the initial confrontation.

A bottleneck situation is created by a segment of the road which capacity is smaller relative to traffic demand than the preceding or succeeding part of the road. This doesn’t have to be a problem as long as the traffic flow is below that of the capacity of the bottleneck. Even in this situation though, there might be congestion at the bottleneck as a consequence of heavy stochastic variations in the traffic flow, but on average these should disappear quickly. The real problem occurs when the traffic continuously exceeds the capacity of the bottleneck, in this case the queues will keep on accumulating until a solution is found.

A triggerneck situation is one of the consequences of the bottleneck. The bottleneck will produce queues occupying the road, blocking intersections and road exits. This makes other road users unable to freely get to their destination. So vehicles not even intending to use the bottleneck may also get stuck in traffic, and in their term cause another queue which causes another queue. A circular chain of trigger necks can cause a total standstill in urban environments, and even on highways.

In situations where peak-traffic may cause heavy congestion, the traffic is often regulated by stop signs, traffic lights, routing limitations and other control measurements. These measurements are used to control and ease the congestion and are often successful in diminishing it. These measurements can however, lead to congestion themselves in which case we speak of Network and Control congestion.

The last kind of congestion is general congestion which is created by the sum of the overall density of the transportation flows in the area.

2.4 Causes Congestion can be caused by a tremendous amount of reasons. Most common are accidents, road works or weather conditions. All these have again underlying reasons linked to a more general condition like traffic safety, technology, and climate conditions. This makes the determining of the real cause of congestion hard. There is often a combination of a direct lead for the congestion and a more general cause like high traffic density.

This is why reasons for congestion can best be divided into three causal factors (OECD, 2007). Micro-level factors, macro-level factors, and exogenous factors. Micro-economic causes relate to the “triggers” of congestion on the road, these are the direct causes that can be found on the road like an accident or a bottle-neck situation. The macro-level relates to the “drivers” of congestion, these are the factors driving the demand for road use and thereby influencing congestion in a more general way as they aren’t directly linked to the congested situations. Examples of these are increasing population, land use, economic growth, or parking. The exogenous factors relates to patterns and the volume of traffic flow.

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Figure 2.1 A schematic view of the different causes of congestion at micro and macro level.

Source: Original from Bovy and Hoogendoorn (2000), adapted by the OECD (2007)

Figure 2.1 displays how the micro-triggers, macro-drivers and exogenous factors independently and jointly influence congestion.

Besides trying to discover the causes of congestion by separating them into triggers or drivers, congestion can also be divided into recurrent and non-recurrent. This division is of importance because both have different solutions if you want to solve the congestion on a particular road segment.

Recurrent congestion refers to the fact that the factors causing the congestion occur periodically, for instance commuting to work, or weekend family visits. These recurrent congestions can be predicted with reasonable accuracy because they happen often and have the same causes every day or week. This is in contrast to the non-recurrent congestion, which can’t be predicted because they haven’t got a fixed pattern throughout the month. They happen unexpected and can be caused by a great variety of reasons like a accidents, a special event, or an unexpected summer day, causing everyone to go out and enjoy the

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weather. These non-recurrent congestions are hard to solve because when they occur the cause is often different, and so is the solution. This makes it interesting to try to predict these unexpected causes of congestion. In the case of accidents, regression analysis on particular road segments or intersects can predict the chance of an accident happening on set road or intersect. By means of statistical analyses one can even check the influence factors like the weather or school holidays have on the chance of an accident that evening. Knowing which roads or intersects are more prone to crashes has great advances in preventing or quickly clearing the congestion. The same counts for predicting the effects of hot-days or special events. With these regressions and predictions a lot of non-recurrent congestion can be prevented by active congestion management. The estimated non-recurrent congestion percentage for European counties is 55 percent while in urban-regions management policies have often reduced this to 14 to 25 percent of total congestion (OECD, 2007).

2.5 SolutionsIn most research that has been conducted concerning congestion, the focus is upon finding solutions. As we already saw in section 2.2 about the problems of congestion, congestion is a huge problem to society. For the year 2012 it was calculated that in the United States alone, the cost of extra time spend, and fuel burned by congestion was estimated at 120 billion dollars (Mandayam & Prabhakar, 2014). Also with the burning of fuel, toxic pollutants escape into the air. Significant quantities of dangerous air pollutants like carbon monoxide, nitrogen oxide and hydrocarbons which are present in the air, originate from motorised traffic (Donohue, 1990). This in combination with the fact that congestion causes accidents makes congestion a large problem to society (Vickrey, 1969). Finding a solution is thus of great importance. What kind of solution is found largely depends on the what the causes are.

As already stated, in non-recurrent situations like accidents most solutions concern predicting when and where it’s going to happen, and anticipating on these prediction with active road management. Road signs, traffic-lights and safety measures are used to fight non-recurrent congestion.

A major challenge is the driving force of congestion producing the recurrent congestion. In the most simple form, congestion is the consequence of demand exceeding supply. From this you can deduct a simple and often used solution, increasing supply. By building new roads or widening existing roads supply can be increased in great amounts. This method is often used and often the right solution to the problem. As in all solutions for congestions it comes with a few downsides. First of all it is often not possible to build a new road or widen an existing one because of the lack in space, this is especially true for urban environments. And secondly, even if this is possible, chances are the newly build road will be full of traffic in no time. The reason for this is because, drivers first avoiding that road because it was always congested, now start using it again. There are also people who used to take the bike or public transport but now switch back to driving because driving to work on the new high-way is faster. So because increasing supply by building attracts more and new travellers, it is often not be the ideal solution. Policy makers also try to solve congestion on the other side of the equilibrium. By reducing demand. If you want to reduce demand the first thing a economist would say is “we should increase the price!”Pricing congestion is something the famous economist Arthur Pigou already spoke about in his work “The Economics of Welfare” (Pigou, 1920). By charging a fee on driving, it is possible to bring down demand to favourable levels. For this solution you need to know what is favourable, and how much must to charge in order to get there. Congestion can be viewed of as the consequence of negative externalities. Everyone driving adds to the problem of congestion, but nobody takes into account their contribution to the problem

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when deciding to drive or not. According to micro-economics in order to get to a sociably favourable equilibrium the fee should be equal to the negative externalities. In this case the driver is forced to make his decision upon cost including the external cost he’s producing (Mallard & Glaister, 2008).

In theory:

A person drives until his Marginal Private Cost is equal to his Marginal Private Benefit.

Gives equilibrium Q1: MPC=MPB

The Socially favourable optimum is attained when the Marginal Social Cost are equal to the Marginal Private Benefit.

Gives Q*: MSC = MPB

The Marginal Social Cost is equal to the Marginal Private Cost plus the negative Externalities.

Gives: MSC= MPC + Externalities

In order to get to the socially favourable optimum, a fee must be introduced at the height of the externalities.

MSC = MPC + fee

Now the Marginal Private Cost are equal to the Marginal Social Cost, making people drive until their Marginal Private Benefit is equal to the Marginal Social Cost, eliminating all negative externalities.

MPC = MSC => MPB=MSC

Figure 2.2 Negative Externalities

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Source: Mallard and Glaister (2008, p.152)

The problem with congestion pricing is that it’s very hard to determine the most efficient quantity of demand for “road usage”. And if you know the optimal demand quantity it is hard to reach this level, because of the unknown price elasticity of vehicle use. Also there are some social aspects to levying a fee on driving. You have to decide if poor people pay the same fee as wealthy people, a fee may have a great influence on the lives of poor citizens, they might not afford to drive any more, resulting in other jobs and other housing preferences. Also there is the social justice statement saying you can’t deprive a citizen of his right to travel. Any income from the fee should flow back to the people (Ye, 2012).

Another policy working on reducing the demand for traffic is the Parking management. With parking management, local governments strive to keep vehicles out of their city centre. The effectiveness of these policies will be discussed later on

3. Parking

On average a privately owned car stands still for 23 hours a day. Up to 95 percent of its lifetime a car isn’t used and must be stalled somewhere (Hagman, 2006). In a perfect world this would lead to one car needing 23/24 of a parking place. Too bad we don’t live in a perfect world, cause each car needs multiple parking spots, one at home, one at work, and some at different convenient places like the supermarket and shopping district. Of course these places can be shared with neighbours, colleagues and fellow shoppers in order to reduce the amount of parking spots needed per car. But here the problems of parking arise , if cars or drivers don’t have assigned parking places, they have to compete with fellow drivers for a spot. This will lead to everyone wanting the most favourable spots. This could be one near the entrance of the mall, or a parking lot which is free of charge. With peoples travel patterns converging, the problem only gets

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bigger (Hagman, 2006). Everyone drives to work at the same time, leading to an excessive demand between 8.00 am and 6.00 pm. At this moment chances are that most parking places at home are left empty. While at 6 pm. everyone drives back home again causing parking problems in front of their houses. The same accounts for supermarkets and shopping districts. Parking spaces must account for this irregular demand for parking, resulting in large parking lots being both over and under used.

When it comes to the satisfaction of the driver, studies have shown that parking problems are the biggest dissatisfying element in the driving experience (Hagman, 2006). Even congestion is considered less worse than having problems to park your car. A reason for this might be that with parking problems one can’t stop whenever he wants. You are kind of forced to keep on driving, although you have already reached you destination. Whilst if you get stuck in traffic, you want to drive, but you are slowed down by the other drivers. You will reach your destination, but only at a later point in time, which you can probably predict if it concerns the daily traffic jam. The estimated time it cost you to find a parking spot is harder to predict. Drivers also very much like to be in control, perhaps being able to drive slowly and with stops is conceived more as being in control than not being able to stop at all.

In order to fully understand the effects of paid parking on congestion, it is important to understand the different aspects of parking. It is important to attain a basic knowledge of how parking works, and what kinds of parking there are in an urban environment. In order to link parking to congestion the problems in parking must be recognized.

3.1 Why is parking often paid?Imagine a parking spot as a physical place near a desired location at which you can leave your car in order to take care of some business. In this simple description of a parking space, parking can to some extend be compared to the textbook case example of the “tragedy of the commons” (Hardin, 1968).

In this theory Garrett Hardin explains the downsides of the common use of a parcel of land which nobody owns and is free for everyone to use. Farmers can make money by freely put their cattle to graze on the fields. Because the field are free and bear almost no cost upon the farmer, the farmers will put large amount of cattle on the fields. The farmers will keep on putting cattle on the fields until their marginal profit equals the cost of putting an extra, say cow, on the fields. Although putting an extra cow on the fields has almost no cost to the farmer, there are exogenous cost involved. For instance the grass, grazed by one cow, isn’t available for another cow. Due to this exogenous cost, it can be profitable for one farmer to put an extra cow on the fields, but this will lead to a loss in profit to all other farmers. As every farmer only considers their own cost, and not the exogenous cost, an inefficient situation will occur at which every farmer will be aggrieved. The problem here is caused by a lack of excludability, farmers can’t or aren’t been fenced from the fields, which allow them to freely put cattle on the fields. There needs to be someone owning the parcel of land who can exclude people from using it. In this way the land owners can charge the farmers a fee at least equal to the exogenous cost they put upon the other users. In practice the fields are often owned by either private farmers or the government, solving the “tragedy of the commons”

When you look at parking there is great resemblance to the common fields. If parking is not regulated, too much parkers will try to park at a limited amount of parking spaces, leading to long searches for a vacant spot (Calthrop, 2002; Anderson & de Palma, 2004). In a situation in which parking is free and not excluded, the parking places near the central busses district (CBS) will be overused. Everyone will try to park there as it is free and it produces the most profit (advantage) to the driver, not taking into

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consideration the cost one parker puts upon the others as they have increased difficulties in parking and might have to park further away. This can again be solved by ownership of the parking places. The owner, either private, or local municipal can exclude drivers for example by a system of fees and fines, or a toll booth. In this way the exogenous cost are covered again. The pricing of parking is often thought of as just a money machine for local governments, or corporate investors, but the theory of the “tragedy of the commons “ explains us there is more to it. In the case of the grazing fields, at the end every farmer will be better off when there is a fee upon letting your cattle graze. And the same accounts for parking, in the end paid parking can produce more consumer surplus in the case of over usage of the parking places.

3.2 Basic economicsIn characterizing parking, it is important to know how the supply and demand of parking are put together. The demand for parking can best be described as a “derived demand” (Verhoef, et al., 1995). This means that the satisfactions doesn’t come from the product itself, but from the things the product allows you to do. In the case of parking, the parking place has no value to you, but it allows you to go to work, or go near a shopping centre. So you value what can be reached with the product, instead of the product itself.

Parking spots can also be described as imperfect substitutes (Calthrop & Proost, 2006). This means that all parking places are substitutes to each other, but people have preferences to one parking spot over the other, as they can be differentiated from each other. In the case of perfect substitutes there is no preference of one over the other, because all spots are considered the same and valued equally. In perfect substitutes there is nothing differentiating one product from the other, at least from the perspective of the customer.

Parking can be described as a imperfect substitute because there are differentiating characteristics causing drivers to value them differently. The most important factor is the location. A parking spot in the middle of the desert is worth literally nothing whilst, two parking spaces near a residence in Boston were auctioned last year for over half a million dollar (Seelye, 2013). Next to the location, the mode of payment, safety against theft, and protection against the weather elements could be differentiating factors.

Parking can be seen as a private good, as drivers can be excluded from parking and the place where one customer parks, can’t be assigned again to another parker at the same time (Glazer & Niskanen, 1992). This makes it competitive.

From the supply side the parking market is considered monopolistic competitive (Anderson & de Palma,2004). This is for the same reason as why parking is an imperfect substitute, many firms offer parking spaces, but the parking spaces are not identical. In this way the market structure is somewhat between that of a monopoly and perfect competition. Also the barriers to entry and exits are high, but not impossible to overcome. This can be seen from the smaller parking garages offered by private companies. In practice many parking garages have local market power, and have a great influence on the parking prices in their district, but hardly any have influence on the city as a whole.

3.3 Parking facilitiesIn most cities there are different ways to park your car. This is partly due to the differences in the demand for parking places, but it is mostly because of the physical limitations of the area. In most streets near the city centre, there isn’t any room for parking lots, so curb side parking places is the most common kind of parking. And if it concerns a busy street, there’s no parking at all because of the congestion it may cause, or because the roads and public transport are using up all the space. In these cases parking garages in by-

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streets of the main road are an answer. In either case, the parking is either on-street or off-street. On-street means, as the word might predict, parking on the streets along the curb side (Parking, 2014). Off-street means quite the opposite, parking your car anywhere but on the street is considered off-street. In practise this means parking your car in parking garages and on parking lots. Off-street can be either indoors or outdoors (Parking, 2014). The on-street parking facilities are owned by the government, this is for the simple reason that they own the streets. Off-street parking facilities can be either public or private property(Anon, 2013). The difference between the kinds of parking can have a different effect on congestion. For instance, the effect of cruising for parking can occur if there are difficulties in finding a curb side spot. Off-street parking facilities might have a different effect on congestion. So the division between on-street and off-street is crucial.

On-street parkingThe on-street parking facilities are a crucial elements in urban environments. They can be used in a very diverse way. They can be used by multiple parkers with multiple destinations at different times (deCerreño, 2002). On-street parking uses less land per parking space than off-street parking, because there is no need for access lanes. It also has some beneficiary characteristics for pedestrians as it create a safety barrier between them and the moving traffic, it slows down the traffic, and reduces the noise levels (Mouzon, 2011; de Cerreno, 2002). As the on-street parking facilities are owned by the government, the government is also responsible for managing it. In practice, it is the local municipal who collects the fees, and have the right to fine cars that are parked wrong, or did not pay the fee. In most counties the fees and fines are part of the income of the local municipal. In inner cities there is almost always a fee upon parking. Unless you have some kind of licence or permit, the fee for parking at the curb side is paid at the parking meter nearby. The first parking meters where a simple time clock you could set by putting coins in them (Novak, 2013). Because the on-street parking facilities became important in managing parking problems and the problems of congestion, the meters have evolved to smart machines that can be set to different fees. The parking meters can now cooperate with different pricing schemes, such as a higher price at peak parking, or a convex-pricing scheme to repel long-term parkers (Nieuwland, et al., 2008; Saltzman, 1994).

Off-street parkingOff-street parking covers all the parking on-street doesn’t. Open air and covered parking lots, and garages are all off-street parking facilities. The big differences for parkers are that off-street facilities can be further away from the destination point, and payment has to be made after one parks. The off-street facilities are often build to accompany the on-street facilities, as the on-street parking alone fails to cope with the large demand for parking (Shoup, 2013). In contrary to on-street parking, off-street parking facilities can also be owned by private companies. Parking garages are often huge buildings, build on expensive ground and can go deep into the ground or high up in the air. The initial cost of parking garages are relatively high compared to on-street parking (Bank, 2008). Local governments are happy to outsource this to private investors. As we can see from table 3.1 the operational management of off-street parking differs from the on-street management. For the on-street facilities, enforcement is needed to control the system of fees and fines. Off-street facilities make use of a toll collection system which can be operated without a penalty system. Having the right to write out parking tickets is often a privilege only governmental authorities have. Operation without enforcements makes the off-street facilities attractive for private investors. Private investors are currently especially pleased with investing in parking because it can be seen as a safe investment in a risky market (Taxman, 2010).

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Table 3.1: Characteristics of On- and Off-Street Parking

Items On-Street Parking Off-Street Parking

Required Physical

Changes

Painting, installation of signage,

parking meters, etc.

Securing for land, paving, installation of toll collection

system, other equipment, and construction of

administrative buildings etc.

Time for

Development

Relatively short (selection of site,

painting etc.)

Relatively long (Arrangement for finance, and construction

of facilities)

Operational

Arrangement

Inspection (enforcement) by traffic

police or private sector is required

Enforcement is not required and the facility can be

operated solely by private sector

Targeted Users Short term (casual users) Short to long term (monthly tenants, regular users)

Source: Asian Development Bank, 2008

Public vs. PrivateFor a potential parker it might not seem important whether a parking facility is private or government owned, but this can have different effects on the city. Parking lot operator can have local market power by which they can make use of a monopolistic competitive situation (Anderson & de Palma, 2004). It can be assumed that a privately owned parking facility has the usual business incentives. A business has (initial) cost and it needs to make a profit in order to attain a positive net present value and thereby keep its investors happy. A privately owned parking facility isn’t at first interested in anything more than the business incentives. In order for private companies to invest in parking, the long-term revenue projections need to make financial sense (Czurak, 2007). A parking facility owned by the government also wants to make money, as it is often a source of income for the local government. However, when deciding to invest in parking, or setting the price of parking, the local government takes into account all the effects it could have on the city. The location, the price, the assignment of parking spots all have influences on the traffic that flows through the city. So the incentive of the local governments is not only to make an as large as possible profit, but also guide and monitor the traffic, and putting a price upon the externalities drivers and parkers produce.

Recently there is a new-trend in the ownership of parking. Local government sell their off-street parking facilities in order to raise money, often to close a budget deficit. The big advantage for the government is that next to the revenue from selling, they can start collecting taxes, because the parking is now privately owned. (Czurak, 2007). The city of Chicago has considered the privatisation of both her on- and off-street facilities (Taxman, 2010). It was assumed that on-street parking was strictly owned by the government, but by signing a very long lease contract, private companies can come very close to owning on-street parking facilities. The long-term lease of parking places to a private operator for periodic payments or a sum of money upfront is also called a public-private partnership. In the Chicago case, the city would received $1.15 billion dollars for a 75 year lease on 36.000 metered spaces and $563 million for a 99-year lease on four parking garages. Other U.S cities like Los Angeles, California, San Francisco and Pennsylvania are considering the privatisation of on- and off-street parking as well. At the time of writing, a deal between the city of Chicago and the corporation “Chicago Parking Meters LLC” has gone thru. Chicago received a cash payment of $1.16 billion in return for lease of the 36.000 parking places for 75

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years. CPM-LLC had a record year in 2013 when they raked in $135.06 million in revenues. This is in great contrast to the revenues when the parking was still in control by the government. The city of Chicago collected $23.8 million in the year 2008, about a sixth of the revenue the privately owned company collected in 2013 (Dumke, 2014).

3.4 Governmental and local municipal interventionThe problem that occurs with parking is to some extend comparable with the congestion problem. In parking situation near the city centre there is way too much demand for parking places, whilst supply is limited. In such situations, governmental interventions is needed. By intervening in the parking market, parking problems can be solved. But often parking is just a tool to manage big urban issues like congestion, and all of its negative effects. By reducing the demand for parking, congestion can be reduced. This link is explained in more detail in section 4.

Intervening in the parking market has far reaching consequences in urban environments. Next to congestion, parking also affects the use of land, air quality, travel behaviour, safety, revenues, and economic development (de Cerreño, 2002). For this reason it is important, policy makers take into account as much as possible positive and negative factors before they intervene. When the government intervenes, it always has to keep in mind the effect it has on the market. The goal of authorities must lie upon fixing the market failure in the most efficient manner. This means bringing the damage of the failure down, but not at all cost (Mallard & Glaister, 2008). In theory this would lead to a situation where there are still parking problems. This is due to the fact that fully solving parking problems would cost too much. The trick is to find the equilibrium at which the Marginal Damage of the Failure (MDF) is equal to the Aggregate Marginal Cost of Abatement (AMCA). In the case of parking MDF means the failure one extra parker causes, and AMCA means the costs that occur if MDF is reduced. Off course these terms are impossible to measure.

Figure 3.1 The cost and benefit relation of correcting a failure

Source: Mallard and Glaister (2008, p.231)

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Intervention by the government can have distorting effects in any market, the parking market is no different. Local governments need to make sure the distortion is kept to a minimum. In parking there are three specific objectives local governments need to watch out for, as they are often in conflict with one other. The desire to regenerate, the desire to restrain and the desire to create revenue (IHT, 2005). For policy makers who want to reduce the amount of congestion, the desire to restrain the traffic will be the biggest priority. However they will have to keep in mind the other objectives. The local municipal is counting on a certain level of income from parking. And local retail will be dissatisfied if parking in front of their inner city stores disappears, as they are afraid this will lead to reduced sales (Mcshane & Meyer,1982). It important for local governments to balance these objectives in combination with creating a solid financial assessment of the cost and benefits (Marsden, 2006).

Tools of the governmentWhen there are market failures, or unwanted outcomes in the eyes of the government, the government can intervene in a couple of ways (Mallard & Glaister, 2008). It can make use of his legal powers in order to enforce a desired outcome. In this case we speak of “command and control” measurements. Another way to steer the market to the right equilibrium is by using taxes and subsidies to demote or promote certain goods. The government can also hand out permits in order to use or produce certain goods, in that way the production and consumption can be monitored. If these can be traded amongst each other, we speak of tradable permits. Tradable permits and command and control are exceptions in parking, and therefore the focus lies more upon taxes and subsidies.

Tradable PermitsThe government can produce an number of permits, and these can then be traded among each other. Each permit gives the right to produce a certain amount of failure. In practice this is often in tons of co2 or other negative externalities. With this method, the optimal point “Q” can be reached in a very precise manner.

This method is based upon the failure that is produced. The optimal amount of failure gets divided into a certain amount of permits. In parking it’s very hard to determine how much the failure is, and how much failure is produced by one parking vehicle. In parking there is thus no intervention of the government by implementing a system of tradable permits.

Command and controlThis is a simple method to adjust market failures. The government uses legislation in order to reach the desired outcomes. In this way the government can force producers to reduce their “failure” to a certain level. If this kind of intervention is possible the optimal amount of damage caused by the failure is always reached.

Command and control is also hardy used in the parking market. It’s a very straightforward method, but impractical to use. It is impossible to calculate the market failure caused by parking, and also the cost of abatement is just an estimation. So the true equilibrium deviates from the estimates, causing in a too low or too high reduction in parking.

Figure 3.4 Intervention with tradable permits. Figure 3.2 Intervention under command and control.

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Source: Mallard and Glaister (2008, p.242 ) Source: Mallard and Glaister (2008, p.233)

Taxes and SubsidiesIf the government is of the opinion to much of a demerit good is being used, it can put a tax upon it. This will increase the price of the product, and thereby demote the use of it. In the case with taxes “T” is fixed, leading to the desired quantity of the demerit good.

The problem in parking however is that the price elasticity of parking is unknown (Kelly & Clinch, 2006). This makes it hard to reach point “Q”. Taxes also introduce a death weight loss, this is a loss in the total welfare at the cost of the government, consumers or producers (Parke, sd).

Figure 3.3 Intervention under a system of taxes and subsidies

Source: Mallard and Glaister (2008, p.237)

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In parking there are only taxes on on-street parking, this is for the reason that the government owns these facilities, and they are the one levying the tax. The height of the tax is hard to determine as the whole fee for parking on-street can be viewed of as a tax. The government thus uses the price as a mechanism to reduce the demand for parking and the congestion problem. Studies have shown that the price is the most important determent in where on parks (Ommeren, et al., 2012; Shoup, 2006). The price is thus a powerful tool to control the flow of traffic. Increasing the price for on-street parking in the inner city, can divert traffic away from these congested areas. The effectiveness of this measurement would be more effective if both the private and the public facilities where taxed (Higgins, 1992).

Compared to the other means of intervention, taxes have the advantage of creating revenue. This is called; “the double dividend effect”. Taxes reduce the market failure and revenues that are collected can again be used against the distortions. Parking places can yield substantial revenues and contribute for an important part to the income of the local government, perhaps this is one reason why this method of intervention is so popular (Taxman, 2010; Shoup, 2004).

Subsidies With subsidies, the parker doesn’t pay the full price for parking. In this case the parking price is lower, and the demand for this parking facility increases. When we look at subsidised parking, there is a lot of literature on private subsidies. This is when companies provide free, or cheap parking for their employees. When parking is paid by the employer there is an increased amount of driving to work and employer paid parking increases the solo-driving (Willson & Shoup, 1990). If employers are offered a possibility to receive a cash payment instead of a parking subsidy the number of solo drivers drops by seventeen percent. Also the number of car-poolers increases by 64 percent and the number of people who walk or bike to work increases with 39 percent (Marsden, 2006). Also in the researches of Willson and Shoup (1990, p.144) and Shoup (1997, p.221) the strong effect of ending a subsidy on parking was discovered. Subsidized parking offered by employers is often a service employers offer their employees, or its part of the fringe benefits. When the government subsidises parking, they aim to regenerate the traffic to another part of the town (IHT, 2005). The government then offers parker free or reduced tariffs for parking at certain parking lots. Policy makers make use of this if they want to promote one parking place over the other. The promoting of a parking lot at the cities edge can relief some pressure off overused parking facilities near the city centre. After drivers park their car at the cities edge they have to travel further into the city, either by public transport or alternative modes like the bike. This concepts is called “park and ride”(P&R). P&R facilities both reduce the parking problems in the inner cities and help reduce the congestion problem (Pickett, 2005; Meek, 2008).

Increasing SupplyParking problems can also be solved by increasing supply. This would mean, building new parking facilities, or making better use of current facilities. Creating more parking places by building new facilities has some downsides. There is often no space to build, and the space that is needed for parking places is often very expensive because it is in the city centre. Also, like building new roads attracts more drivers, building new parking places attracts more parkers (Hagman, 2006).

4. The influence of paid parking on congestion

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Now that we have defined and characterized all the different aspects of both congestion and parking it is time to close the gap between the two. The effect parking has on congestion can be deducted from the choices drivers make. Studies have shown that most people will only leave their car and switch to alternatives if it is hard to park at the destination (Andreasson, 2000; Hagman,2006). Also parking difficulties have a larger influence on travel behaviour than car queues (Hagman, 2006). So it is clear that the individual choices drivers make can be influenced by parking, but what does this mean for the total level of congestion? The main influences parking has on congestion become clear, the moment the local governments intervene in the parking market. Putting a price on parking is the most common tool local governments use in order to reduce congestion thru parking. Pricing parking will have two main effects by which local governments aim to reduce congestion. The first one is reducing the amount of traffic entering the city. The idea behind this is very straightforward, when parking becomes paid, or more expensive, it is expected that less of it will be used. This will lead to less traffic in the city’s centre. The second main effect a higher price of parking has, is less cruising for parking. The thought behind this, is that if parking becomes more expensive, the (curb) parking spots will be less used, resulting in a lower occupancy level, which enable parkers to park their car without any search for vacant spots. Next to these two main effects which most literature focuses upon, there is a side effect of paid parking which can influence congestion. The revenue collected by paid parking can be used to invest in public transport, in order to reduce congestion, this is called the double dividend effect.

4.1 Fewer cars in the cityLess traffic in the central city is the fundamental idea behind pricing parking. When parking in the city becomes more expensive, basic economics suggest less of it will be used. When parkers face an increase in the parking prices, they will either park for a shorter amount of time or search for alternatives. A possible alternative for parking in the city centre might be parking near the borders of the city. The drivers can park their car at the city’s edge and travel further by public transport or by bike. It is also possible that because of the increase in price, drivers are more prone to using the public transport for their whole journey. These substitutions promise a direct reduction of the amount of traffic and thereby the amount of congestion, but as with any measurement, there are some drawbacks.

In order to reduce the demand for parking the price must be increased. Local government can set the price they want, and can directly intervene in the parking market. Increasing the price of parking to reduce the demand can be seen as a tax measurement. Putting a tax on parking will lead to higher parking prices and thereby less parkers, but it will not necessarily lead to less traffic congestion. Pricing parking can be seen as taxing road usage at the end of the journey (Roth & Thomson, 1963). The first problem with pricing parking arises here. If there is no end of the journey, or the journey ends somewhere else, the road usage will not be taxed. Parking prices will not have the desired effect on this kind of traffic, the opposite is true. The total amount of traffic consist of a part that wants to park in the city and a part that just wants to drive through. As they both make use of the roads, there is a certain balance between the two. When there is a price increase in parking, less of the “parking traffic” will make use of the roads. This makes road usage more attractive for the drive through traffic as they are not affected by the price increase of parking. The parking price increase will thus just shift the balance from parking vehicles to drive through vehicles, causing no reduction in the total amount of congestion (Roth & Thomson, 1963). The second problem with taxing congestion thru parking is that drivers from far away pay the same tax as parkers who come from just a couple of blocks away. So parkers who add more to congestion pay the same tax as people who hardly add anything to the congestion problem. Ideally you want to differentiate between these two,

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in order to maximize the effect of parking taxes. The last problem with a parking tax, is that it is almost always equal throughout the day. The problem of congestion and the parking problems are both highly volatile. Recurrent congestion has a high peak in the morning and at the beginning of the evening caused by commuting traffic, and the peak of parking difficulties are often between these moments, depending on the location. The best tax would be one which is highest during these peaks in order to reduce them, but this is often not possible.

The reduction of the amount of traffic thru parking tariffs is questionable. An increase of parking tariffs will lead to a reduced demand for parking which in the short term might be accompanied by less traffic, but this effect tends to vaporize as drive through traffic takes over the roads. According to a study by Glazer and Niskanen (1992, p.123), increasing parking tariffs might even have a positive effect on the amount of traffic. The increased prices might cause the commuters to park elsewhere or seek for alternatives. This makes more room to park the cars of shoppers and delivery vans. There will be more cars parking for a shorter amount of time. This increases the total usage of the roads adding to the problem of congestion. This effect can only be taken away if the price increase is accompanied with a reduction in supply (Glazer & Niskanen, 1992).

The reaction of the traffic on a price increase is very hard to predict as there are different price elasticity for different parkers. Business and non-business, the length of stay and even engine size determine how a parker reacts on a price increase (Kelly & Clinch, 2006). It is clear that parking tariffs have an effect on the composition of the traffic in the city, but due to the substitution of drive through traffic for parking traffic and due to different price elasticity’s the effect of a parking price increase on the total amount of traffic is ambiguous.

4.2 Cruising for parkingCruising for parking can best be defined as the extra movements a vehicle has to make due to the fact that it has to search for an available parking spot. When parking places are not freely available to parkers a parker has to search for vacant spots. This means that he will have to drive slower than he would if he could just drive up to a spot and park. In urban areas, there are often no possibilities to overtake a slowly moving vehicle. This causes all the traffic behind the cruising vehicle to reduce their speed as well, which might cause a congested situation if the streets are saturated enough. Besides driving slower than the rest of the traffic, cruising vehicles also make far more miles than drivers who can park at once. The longer parkers have to drive for a vacant parking spot, the more traffic there is in the city centre. According to a report based on 22 studies conducted in the United States, 30 percent of all traffic in urban areas are cruising (Shoup, 2005). So cruising vehicles drive slower and drive longer, and when they finally find a parking spot, they need some extra time to park their car neatly in the box, that is it they don’t have to wait until the previous parker leaves. This again puts the traffic behind the car to a stop. Because there are often no means to go around the parking vehicle, the parking itself also creates congestion. In situations where up to 30 percent of the traffic is cruising, it can be imagined that whole streets get congested, which will leak onto the mean streets, causing the whole city to get congested. Of course cruising traffic is not the only reason for congested cities but it definitely contributes to the problem.

Modelling cruisingIn most urban areas, the people have a choice. They can either park on- or off-street. Except for in many European cities, the on-street parking facilities are often cheaper. Also on-street parking facilities can be closer to the destination. This makes the on-street facilities very popular, causing the supply to come short

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to the large demand for curb-side parking. The off-street parking garages might be more expensive, but most of the time there are vacant parking sport available. Parkers can thus either drive to a parking garage and park their car directly, or they can choose for a parking spot along the side-walk, meaning they have to cruise for a parking spot. So why would one cruise for parking, instead of parking directly in a nearby parking garage? In papers by Shoup (2006, p.479) and Ommeren et al. (2012, p.123) a model is created by which can be predicted if one is more or less likely to cruise for parking depending on different variables. It turns out people are willing to cruise as long as their total cost of parking at the curb side doesn’t exceed the total cost of parking in an off-street parking garage. In total cost the cost of the parking fee, additional fuel burned, time loss, and walking efforts are all included in the cost of parking. Parkers probably don’t know all these factors precisely, but for the model it can be assumed that they are rational decision makers, and thus account for these factors. When deciding to park at the curb or in a parking garage, the following variables are of importance (Shoup, 2006).

Price of curb parking ($/h) Price of off-street parking ($/h) Parking duration (h) Time spent searching for parking at the curb (h) Fuel cost of cruising ($/h) Number of people in the car (persons) Value of time spent cruising ($/h/person)

The influences of a lot of these variables are pretty straight forward and easy to interpret. When the price of curb parking increases, parking at the curb becomes less attractive and when the prices drop, curb parking becomes more attractive. When off-street parking becomes more expensive, the direct substitute, curb-parking becomes more attractive. The other way around accounts for a price decrease. Perhaps the parking duration is less predictable. When the duration of parking is expected to be longer, people are more likely to park at the curb. This could be due to the fact that the search cost for a parking spot at the curb can be spread out over a longer period of time. Also the price for curb parking is cheaper, parking for a longer amount of time has a greater financial benefit in absolute terms. The time you have already searched for a curb side spot may also influence your decision to keep on looking for a curb spot, or give up and park in a parking garage. When cruising, the average vehicle is busy finding a parking spot for 8.1 minutes (Shoup, 2006). In this time, extra fuel is burned. The fuel cost can contribute to your decision to cruise or not. The two remaining variables are the number of people in the car and the value of the time spent cruising. When there are more people in the car, the higher cost of the parking garage can be spread out by more persons, also the value of time of the person is of importance in the decision to cruise. With more people in the car, the cumulative value of time might be way higher than the difference in parking fee. In the theoretical setting of a paper by Ommeren et al. (2012, p.123), mostly the same variables are used. They have added one extra variable which is called travel duration. According to their paper cruising time will increase with travel duration. The reason can be sought in the fact that the cruising is relatively a small part of the journey if one comes from a greater distance, or travels for a longer period of time. It is also discovered that the amount of cruising for parking is substantially higher for leisure activities than for work-related activities (Ommeren, et al., 2012).

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The cause and effect of cruisingAs can be seen from the model for cruising, a lot of the variables influencing whether one is going to cruise for parking or go straight to a parking garage comes down to financial motives. Curb parking becomes relatively cheaper if you stay for a long time. Fuel cost can be measured in monetary terms. And the number of people in the car influences the cost per person on curb side parking. It is safe to say that the overwhelming exceeding demand for on-street parking is largely caused by a price set below the market price. The price of on-street parking is set in most countries, below the price of parking garages.(Arnott & Rowse, 2009). A price for curb side parking set below the market price, and way below that of the alternative, parking garages, encourages parking at the curb side, and thus stimulates congestion. Proof for the effects, price and price differences between on- and off-street parking have on the amount of traffic is provided in a Dutch study which focuses upon Europe and the Netherlands (Ommeren, et al., 2012). In this study a survey is conducted with which the auteurs aim to estimate the average cruising time per trip, and the total amount of cruising in cities. It turns out that in Europe the average amount of cruising per trip is 36 seconds and 30 percent of the trips involve cruising. This is in great contrast to non-European cities where there is also a cruising rate of around 30 percent, but the average time spend on cruising is 8 minutes (Shoup, 2006; Ommeren, et al., 2012). What distinguishes European cities from the rest is the fact that in most European cities, curb side parking tariffs are equal to the tariffs in parking garages. This might lead parkers to choose for off-street parking facilities, easing the amount of cruising vehicles looking for a parking spot. The main effect of a reduced demand for curb side parking is the fact that there is less over usage of the on-street parking facilities. The over usage causes a lot of congestion, as drivers can’t immediately find a parking spot. They need to drive slower and wait for other parkers the leave the parking spot. Studies show that the efficient occupancy level of on-street parking lies around 85 percent(Roth & Thomson, 1963). In this way parkers can drive to their destination and easily park their car, with little effect on the cars behind them, and thereby not add to congestion. It is thus of great importance to prevent overusing of the on-street parking facilities by keeping the occupancy rate at the efficient level.

Increasing the price of parking in order to reduce the amount of cruising for parking can be seen as an effort to reduce the failure from the demand side of the problem. In cruising for parking the problem is that there is too much demand for curb side parking, causing almost every spot to be taken. If almost every spot is taken, one really needs to search for a vacant parking spot. A solution from the supply side would be, increasing the amount of curb side parking places. In this way the occupancy level of the parking facilities will go down, and there is no need to search for parking again (Kelly & Clinch, 2006). However the usual problems arise here, there is almost no space and the cost are high. And as in the case with building new roads, building new parking places attracts more and new parkers. In a lot of cities in the United States the urban planners do still hold on to the minimum parking requirements, by which they aim to accommodate for peak parking by increasing supply (Shoup, 1999).

4.3 Double dividend effectBesides reducing the amount of traffic, or the amount of cruising, increasing the price for parking might have another positive effect. It can create extra revenue for local governments. Often revenues relate positively to fees (Adiv & Wang, 1987). Charging a higher price for parking doesn’t always result in higher revenues, because often less people will make use of the parking spots. However price increases are implemented to reduce an excess demand for parking spots, so an increase in revenue due to the price increase is certainly not uncommon. When a reduction of a negative externality due to a taxation

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measurement comes with an increase in revenue we can speak of a double dividend effect. Raising the parking meter fee often generates double dividends (Arnott & Rowse, 2009).

The great advantage of the double dividend is that it can be used to fight congestion again, and thereby increasing the effectiveness of the price increase. Investments financed by parking fees can stimulate the public transport sector, and reduce congestion even further.

The biggest example of the double dividend effect is perhaps the congestion toll in London. Before the congestion toll was introduced, it was agreed that the revenue would be invested in the public transport sector. By the year 2006, 80 percent was invested in the bus sector, 11 percent on road safety, and the remainder was spend on initiatives supporting walking and cycling (Leape, 2006). One example of double dividends for parking specific is the Dutch Mobility Fund in Roermond (Metz, 2013). This is a joint public and private initiative with the goal to increase the train usage to get to Roermond. The revenue of the parking facilities are used to fund the Mobility Fund, which they can then reinvest in transportation mode altering methods (Arntzen & Lindeman, 2013). Double dividends are thus a great help in reducing congestion via parking management. And when the profits flow back to the citizens in the form of direct investments, the social acceptance from the people, supporting the tax measurements are at a higher level. (Raux, et al., 2009; Ye, 2012).

5. Conclusion and discussion

Congestion is a large problem to almost every urban area with a large population density. The problem with congestion is that it cost time and energy, something everyone experiences when they step into the car. Next to time and energy, congestion also produces extra pollution and accidents, these are cost most drivers don’t take into account when deciding to go for a ride or not. Because congestion is so harmful to society, it is important to examine what causes it, and what factor can influence congestion. Parking is one of these factors. When looking at the kinds of congestion, the multiple interaction situation is the most common form of congestion caused by parking. This form can both occur in an recurrent and a non-recurrent way. The non-recurrent congestion can be harmful to society because it can be hard to predict, and thereby making road trips unreliable. The recurrent congestion is also a major problem, because the cause of the congestion is hard to solve. Most of the time, the supply of traffic is just too large. Reducing the supply of traffic, or the demand for road usage is the most frequently used tool in solving the congestion problem. This is done by all kinds of congestion tolls, and taxes. Another way of solving the congestion problem would be increasing the supply of roads. This has been done in practice a lot, but has as a downsides that it stimulates the growth of the traffic. Intervention in the parking market is often needed when there is a great over usage of the most popular parking places. When the price for parking is to low, or doesn’t exist, over usage can be a problem. This can be compared to the tragedy of the commons (Hardin, 1968). This is a theory which explains why the common use of parking facilities create problems when it’s not priced. This can be seen in a lot of American cities where there is no, or a very low parking fee for the on-street parking. In this case intervention of the government can be a successful tool in eliminating parking problems. The government’s frequently used tool is a system of taxes, this increases the price, and influences the demand for parking.

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In most literature, a parking fee is thought of as having two influences on traffic. It reduces the amount of traffic and it reduces cruising behaviour. The first one is ambiguous tough. An increase in the parking fee will in the beginning reduce the amount of traffic, as less drivers are willing to park at a higher cost, less drivers take the car to the city centre. This effect will however fade away as the freed up road space gets occupied with drive through traffic. It is even possible that a price increase will increase the amount of traffic as parking spaces are better available to people only intending to stay for a short amount of time, like shoppers and deliveries vans. The total direct effect paid parking has on the amount of traffic is thus hard to estimate.

The effect cruising has is more obvious. Although the effect of paid parking on congestion via cruising is pretty indirect, it is more clear this has an desired effect. Higher parking fees lead to a lower occupancy rate in the on-street parking. This has a major effect on the amount of cruising, because now people can find a parking spot instantly. Less cruising means less congestion.

The last effect of paid parking discussed is the double dividend effect. Next to the favourable effect a price increase has, the extra revenue raised by that same price increase makes the measurement extra effective. The raised revenue can be reinvested in for instance, public transport, and thereby create an extra punch in fighting congestion.

It seems that paid parking has multiple ways of influencing congestion. And because of the reduced amount of cruising and the double dividend effect, it is likely that paid parking reduces congestion. Although it should be straightforward, the direct effect of paid parking on the amount of traffic is unclear. In search for a true and full image of the influence parking has on congestion, this is one factor which should be further researched.

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