Determining the Parking Fee Using the Contingent Valuation Methodology

Abstract

Implementing new parking facilities amounts to an urban sustainable planning and development problem. A significant part of this problem is the estimation of the appropriate fee prior the new parking services go in operation. This paper describes the framework for estimating the value drivers place on parking facilities and uses a Greek tourist town as an illustrative case study. Alternative fee scenarios for establishing new parking facilities are formulated using the contingent valuation method with a double bound dichotomous choice question format for potential user’s willingness to pay (WTP) for these new services. Moreover, the WTP can be adopted as an effective tool to determine the parking fee in cases where demand-price curve and value of time are unknown. This approach helps also pinpoint and evaluate variables that influence the decision of potential users to pay for a parking fee. It relates WTP with the users’ socioeconomic characteristics, urban attitudes, the residence area, and the opinion of users concerning urban problems. These results are of use to urban planners, authorities, operators, investors, and survey designers when planning the establishment of new parking facilities.