I’m stuck on a Economics question and need an explanation.
Read and consider the text In The News excerpt in section 7.3: "The Invisible Hand Can Park Your Car”.
- the law of supply and demand and price effects on producer surplus relate to the trial policy described in the article.
- how the principles of economics can be seen at work in the article.
- The role that technology and data play in the policy
Invisible Hand Can Park Your Car IN THE NEWS
In many cities, finding an available parking spot on the street seems
about as likely as winning the lottery. But iflocal governments relied
more on the price system, they might be able to achieve a more efficient
allocation of this scarce resource.
A Meter So Expensive, It Creates Parking Spots By Michael Cooper and Jo
AN FRANCISCO—The maddening quest for street parking is not just a
tribulation for drivers, but a trial for cities. As much as a third of
the traffic in some areas has been attributed to drivers circling as
they hunt for spaces. The wearying tradition takes a toll in lost time,
polluted air and, when drivers despair, double-parked cars that clog
traffic even more.
But San Francisco is trying to shorten the hunt with an ambitious
experiment that aims
to make sure that there is always at least one empty parking spot
available on every block that has meters. The program, which uses new
technology and the law of supply and demand, raises the price of parking
on the city’s most crowded blocks and lowers it on its emptiest blocks.
While the new prices are still being phased in—the most expensive spots
have risen to $4.50 an hour, but could reach $6—preliminary data
suggests that the change may be having a positive effect in some areas.
Change can already be seen on a stretch of Drumm Street downtown near
the Embar-cadero and the popular restaurants at the Ferry Building. Last
summer it was nearly impossible to find spots there. But after the city
gradually raised the price of parking to $4.50 an hour from $3.50,
high-tech sensors embedded in the street showed that spots were
available a little more often—leaving a welcome space the other day for
the silver Toyota Corolla driven by Victor Chew, a sales-man for a
commercial dishwasher company who frequently parks in the area.
“There are more spots available now,”
said Mr. Chew, 48. “Now I don’t have to walk half a mile.” San
Francisco’s parking experiment is the
latest major attempt to improve the uneasy relationship between cities
and the internal combustion engine—a century-long saga that has seen
cities build highways and tear them down, widen streets and narrow them,
and make more parking available at some times and discourage it at
others, all to try to make their downtowns accessible but not too
The program here is being closely watched by cities around the country.
With the help of a federal grant, San Francisco installed parking
sensors and new meters at roughly a quarter of its 26,800 metered spots
to track when and where cars are parked. And beginning last summer,
the city began tweaking its prices every two months—giving it the
option of raising them 25 cents an hour, or lowering them by as much as
50 cents—in the hope of leaving each block with at least one available
spot. The city also has cut prices at many of the garages and parking
lots it manages, to lure cars off the street....
The program is the biggest test yet of the theories of Donald Shoup, a
professor of urban planning at the University of California, Los
Angeles. His 2005 book, “The High Cost of Free Parking,” made him
something of a cult figure to city planners—a Facebook group, The
Shoupistas, has more than a thousand mem-bers. “I think the basic idea
is that we will see a lot of benefits if we get the price of curbside
parking right, which is the lowest price a city can charge and still
have one or two vacant spaces available on every block,” he said. But
raising prices is rarely popular. A chapter in Mr. Shoup’s book opens
with a quote from George Costanza, the “Seinfeld” char-acter: “My father
didn’t pay for parking, my mother, my brother, nobody. It’s like going
to a prostitute. Why should I pay when, if I apply
Source: New York Times, March 15, 2012.
myself, maybe I can get it for free?” Some San Francisco neighborhoods
recently objected to a proposal to install meters on streets where
parking is now free. And raising prices in the most desirable areas
raises concerns that it will make them less accessible to the poor.
That was on the minds of some parkers on Drumm Street, where the midday
occupancy rate on one block fell to 86 percent from 98 percent after
prices rose. Edward Saldate, 55, a hairstyl-ist who paid nearly $17 for
close to four hours of parking there, called it “a big rip-off.” Tom
Randlett, 69, an accountant, said that he was pleased to be able to find
a spot there for the first time, but acknowledged that the program was
“complicated on the social equity level.”
Officials note that parking rates are cut as often as they are raised.
And Professor Shoup said that the program would benefit many poor
people, including the many San Franciscans who do not have cars, because
all parking revenues are used for mass tran-sit and any reduction in
traffic will speed the buses many people here rely on. And he imagined a
day when drivers will no lon-ger attribute good parking spots to luck
The new San Francisco electronic parking meter helps equilibrate supply
“It will be taken for granted,” he said, “the way you take it for
granted that when you go to a store you can get fresh bananas or