Last Thursday I read in the Daily News about Parking Services. It was an interesting article and a case study for policy solutions to economic problems. In fact, the question of who will be allowed to park on campus illustrates a fundamental principle of economics: resources are scarce and must somehow be distributed. In this case, the resource is the supply of parking spots.
Let's take a look at parking from an economic perspective. The simplest case is the free-for-all, where parking is first-come, first-served. That's not particularly desirable: not only would you have to get up super-early to get a good spot, the university loses money maintaining and building parking lots. Additionally, a number of road rage incidents is conceivable.
What if the university puts in place penalties for unlicensed parking and sells permits? Well, in the short run - for example, over a period of one or two years, not long enough for the university to construct a new parking lot or garage - the number of parking spots on campus is constant, so the price of parking spots is determined entirely by student and faculty demand for the spots. Supposing Parking Services simply prints a new permit every time someone comes in and pays them, we can see whether they are charging too high a price or too low a price by checking whether there are empty parking spots or people are fighting over who gets to park where.
But the situation in the university is a little bit more complicated because some lots are more desirable than others. Therefore, simply selling a "one-size-fits-all" permit isn't quite satisfactory enough: there will still be a sort of first-come, first-served allocation mechanism.
Without discrimination based on location, Parking Services also isn't making as much money as it could. It obviously recognizes this, which is why it classifies various lots differently and sells those lots' permits at different prices - for example, residence hall lot permits are (presumably) sold at a different price than restricted lot permits.
Is the current system the most efficient? What about the most beneficial? Well, if I were in charge of Parking Services, I would make some changes. Instead of writing permits by lot, I would issue permits by spot, clearly numbering each parking spot on campus. I would hold an online auction - available only to university students and faculty - in which I auctioned off every parking spot. As pretty near perfect price discrimination, this would maximize my revenue, at the same time excuse me of accusations of price gouging: after all, the auction set the prices, not me!
Moreover, I would make parking permits tradeable goods instead of attached to a particular license plate number; instead of writing fines to the person who owns the permit, I'd try to cross-reference the Indiana vehicle license registry and issue the fine directly to the owner of the vehicle.
I suspect that Parking Services, like many airlines, issues more permits than parking spots since people often don't stay parked all day, or come in every other day. This can be simulated by issuing permits for certain blocks of time; Parking Services can keep track of what percentage of time a permit is used, so if people buy a permit and only use it, say, four days out of 30, they can always re-auction the spot.
But wait - we are applying certain free market assumptions to this situation; is this justified? In particular, is the value an auction participant places on buying a permit adequately reflected by his ability to pay? Are there certain people whose presence on campus is desirable or necessary and is not reflected in the price charged them? Are there people who will need to have a car, regardless of how much they can pay?
The answer to some of these questions is "yes," so to be fair we'll have to make some alterations to my system. What about faculty or commuter students? They have to make it onto campus with cars, so they have to get permits. I suggest an earlier auction for faculty and commuters - if someone doesn't want to pay a lot of money, or can't afford it, he can make a penny bid on a spot by the stadium, for instance.
What about people who simply can't afford not to have a car on campus? I really can't think of a situation where this is the case, but just in case we could perhaps have people apply for a waiver to participate in the faculty auction.
Ultimately, this boils down to whether or not cars are a luxury: do the vast majority of students need a car to function at Ball State? The answer is no, so I have little sympathy for criticism of the parking system at Ball State, especially if the system can be made more efficient. If you really want the privilege of parking your car on campus, put your money where your mouth is and pay up, be it fee or permit.
Write to Neal at necoleman@bsu.edu
Read More
Three Air Jam teams take home the win
October 12, 2012Nineteen teams shimmied, shook and flipped for a sold out John R. Emens Auditorium on Thursday night during the 25th annual Air Jam.
Bill Clinton Speaks at North Central High School
October 12, 2012Former President's Speech Could Have Effect on State Senate Race
