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Title: The Price Doesn’t Matter if You Don’t Have to Pay: Legal Exemption as an Obstacle to Congestion Pricing

Author(s): Manville, Michael and Jonathan Williams

Published: 2010 by UCLA Lewis Center for Regional Policy Studies, UCLA Institute of Transportation Studies, UCLA Department of Urban Planning, Fehr and Peers Associates (Working Paper)

Online Access: http://www.its.ucla.edu/research/rpubs/Manville_Williams_Placards_Dec_2010.pdf

Abstract: Transportation analysts frequently recommend pricing as way to combat road congestion. Market prices for curb parking are a particularly attractive way to implement this approach, both because paying to park is a less alien idea than paying to drive and because the travel involved in cruising for parking is almost entirely socially wasteful. However, the literature on performance-priced parking has thus far ignored the possibility that pervasive nonpayment—through rent-seeking, opportunism, or fraud—will dilute the efficacy of market prices. In this paper we use an original survey of thousands of parking meters in Los Angeles, California to show that at any given time almost 40 percent of vehicles parked at meters are both not paying and not breaking any laws. We document, in other words, a high incidence of legal nonpayment. We also show that across an entire day, vehicles that are legally nonpaying consume more meter hours than vehicles that pay or that occupy spaces illegally. The implications of this research are twofold. First, legal nonpayment costs local governments significant amounts of revenue each year. Second, and more importantly, the high rate of legal nonpayment threatens to undermine the effectiveness of policies built around market-prices for curb parking. We suggest policy reforms for cities confronted with high levels of legal nonpayment. Chief among these reforms is an end to the practice of granting free, time-unlimited parking to vehicles displaying disabled placards. These laws are present in at least 23 states, and pose a serious threat to the effectiveness of market-priced parking.

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