The determinants of garage prices and their interaction with curbside regulation

Abstract

The market for parking is characterized by intrinsic distortions such as cruising in search of a parking space and garage market power. Theoretical studies stress that the price differential between curbside and garage parking fees is critical in addressing this inefficiency; yet, the interactions between the two have received little attention to date in the literature. By drawing on a new self-constructed database for all the garages in the city of Barcelona, we empirically explore the determinants of garage prices. Our results indicate that prices are mainly influenced by fixed and variable cost drivers, the dominance position of the garage in its surrounding market and the garage's interaction with curbside parking. We also find that prices react to the scarcity of parking spaces in the street and to the curbside price fixed by the public authority.