Parking Policies in Dense Urban Areas: A Comparison of Hourly, Progressive, and Time-of-Day Pricing

Parking supply and demand are often imbalanced in urban areas, causing adverse consequences such as excessive search times and long walking distances. Many parking authorities use parking pricing as a demand management strategy by charging either a fixed daily fee or an hourly price for parking. An emerging alternative is progressive pricing, where drivers pay an hourly price that increases if their parking duration is longer than a predetermined threshold.

An econometric model is developed to investigate the optimal design of hourly and progressive pricing under revenue and social welfare maximization. The equilibrium properties of the generalized econometric model are then examined. A parking capable micro-simulation model of a study area in downtown Toronto, Canada, is also developed to validate the econometric model. Results show that when the market is composed of two distinct driver groups, progressive pricing yields a greater revenue compared to hourly pricing under revenue maximization.