I was recently in a midlands town, on a weekday morning. Like most such places it had on street pay parking. Like most places, it was pretty haunted at that junction. There were therefore vast numbers of available spaces in which to park, but the cost remained fixed. This got me thinking
Much of the criticism directed at ‘economics’ over the last half decade has been in fact directed at a particular branch of macroeconomics. This failed, dismally, in terms of explaining or predicting the crisis. It succeeded, massively, in capturing the minds and policy making apparatus of Very (self)Important People. All this criticism however spills over on all of the ways of economic thinking. People dismiss the entire edifice on the basis of one part.
One thing we know from economics is that, within limits, people respond to money based signals. We see, or rather do not see, the evidence as we drive along. Recall that not so very long ago the hedges were festooned with plastic bags. The introduction of a modest charge for plastic shopping bags has had a dramatic effect on our habits. So, we can change our habits.
Onstreet parking is a scarce resource. It is one that can and is charged for. Where the problem is however is that the charge is invariant to demand. At times when there is almost no demand and supply is fixed we would normally see prices fall; thus on a Tuesday morning in deepest Leitrim the price should be very low. The obverse should be the case on times of higher demand, weekends or mart days for example.
San Francisco has been experimenting with a market pricing approach to on street parking. It has so far proven quite successful. We might consider this in Ireland. Ew already have a fairly significant rollout of pay by text parking approaches. All that is required is a sensor at each parking space, linked to a server, which changes prices to reflect demand. The objective is to ensure that there is optimal use of the scarce resource.
A problem outside large cities is that there is a law of unintended consequences in action. Take Naas, where I live. Having for decades allowed little commercial development withing the town boundary we then saw in the boom the usual ring of out of town hypercenters being allowed. This was good for the council in terms of development levies and disastrous for the town in the creation of an almost economic dead zone in the center. To incentivize people to come into the town the council has made Saturday parking free. This issue, the legacy of what passed for planning in the late 90s and noughties, will take some unwinding.
Within the cities however there is no reason why this approach should not be considered. We know from previous research that Irish motorists have a negative price elasticity of demand ; higher prices deter parking, lower encourage. Lowering prices, to the marginal level to ‘clear the market’ , as would be the case during the weekday lulls, would encourage people back into the towns, resulting in more activity. The weekend should not be free but could be priced at a marginal but reduced level, to continue to encourage.