Monday , November 18 2019
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Nonlinear Parking Pricing Now!

Summary:
Parking meters rarely allow you to buy as much time as you like.  Instead, they impose a maximum time quantity of 1 hour, 2 hours, or 4 hours.  Why bother?  The standard story is that nearby merchants don’t really want people who come to park.  They want people who come to shop.  Quantity restrictions keep out commuters – and leaves space for folks who want to swing by and spend some money. As long as you charge parkers with traditional coin-operated meters, there’s no easy way to appease local merchants.  With parking apps, however, there’s clearly a better way to make life more convenient.  Instead of setting strict quantity limits, why not just set non-linear prices?  Such as: 1 hour                      %excerpt%.00 2 hours                    .00 3 hours

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Nonlinear Parking Pricing Now!

Parking meters rarely allow you to buy as much time as you like.  Instead, they impose a maximum time quantity of 1 hour, 2 hours, or 4 hours.  Why bother?  The standard story is that nearby merchants don’t really want people who come to park.  They want people who come to shop.  Quantity restrictions keep out commuters – and leaves space for folks who want to swing by and spend some money.

As long as you charge parkers with traditional coin-operated meters, there’s no easy way to appease local merchants.  With parking apps, however, there’s clearly a better way to make life more convenient.  Instead of setting strict quantity limits, why not just set non-linear prices?  Such as:

1 hour                      $0.00

2 hours                    $1.00

3 hours                    $3.00

4 hours                    $6.00

Each extra hour    +$3.00

Notice: This still favors people who park briefly, shop, and leave – just as local merchants prefer.  But it creates a safety valve for commuters, people who want to see a movie and shop, people who get held up in a meeting, and so on.  In the immortal words of The Six Million Dollar Man, “We have the technology.”  So why not?

Nonlinear Parking Pricing Now!

Bryan Caplan
Bryan Caplan is Professor of Economics at George Mason University and Senior Scholar at the Mercatus Center. He has published in the New York Times, the Washington Post, the Wall Street Journal, the American Economic Review, the Economic Journal, the Journal of Law and Economics, and Intelligence, and has appeared on 20/20, FoxNews, and C-SPAN. Bryan Caplan blogs on EconLog.

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