The sensitivity of on-street parking demand in response to price changes: A case study in Seattle, WA

This study investigates the sensitivity of on-street parking demand using the automatic transaction data from parking pay stations obtained before and after a parking rate change that was implemented in Seattle in early 2011. The parking rate implementation is based on performance-based pricing where rates are increased, decreased, or not changed in neighborhoods with occupancy levels higher than, lower than, or within the desired level. We calculated the price elasticity of on-street parking demand, or the percentage change in block-level occupancy in response to a change in pricing, modified by time of day and neighborhood characteristics. This study is the first one that calculates price elasticity by time of day for on-street parking demand on a block level in the U.S. context. This study is also the first one that empirically derives how neighborhood characteristics affect on-street parking demand in response to pricing. Moreover, this study looks into how pricing results in changes in parking turnover rates, parking duration and total revenue generated. Results confirm our hypotheses price elasticity of the parking occupancy is inelastic and varies by time of day and neighborhood characteristics. In addition, the results showed that the pricing also affects parking duration: motorists park for a shorter time on average during the day in neighborhoods with increased rates and longer in neighborhoods with decreased rates. Performance based pricing policy seems to be lowering the turnover rates on average during the day in neighborhoods with increased rates, however, it appears working ideally in the peak-hours when the parking demand is the greatest, allowing more motorists to park. The decreased rate seemed to be increasing the parking occupancy during peak-hours when motorists see the benefit in paying lower fees. The study demonstrated that the estimated elasticities can be used to determine the optimal parking rate to achieve a desired level of parking occupancy on every block in the study area. This method can be easily applied in every city that has similar parking pay stations. (C) 2012 Elsevier Ltd. All rights reserved.