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Residents are often offered on-street parking at a fraction of the market price which may cause excess car ownership. However, residential parking costs are difficult to observe, so we propose an approach to estimate implicit residential parking costs and then examine the effect of these costs on household car ownership. We apply our approach to the four largest metropolitan areas of the Netherlands. Our results indicate that for city centres, annual residential parking costs are around e1000, or roughly 17 percent of car ownership costs. Households facing a one standard deviation (e503) increase in annual parking costs own 0.085 fewer cars on average, corresponding to a price elasticity of car demand of about −0.7. We apply these estimates to gauge the impact of raising residential parking costs and the potential implications of automated vehicles.

Residents are often offered on-street parking at a fraction of the market price which may cause excess car ownership. However, residential parking costs are difficult to observe, so we propose an approach to estimate implicit residential parking costs and then examine the effect of these costs on household car ownership. We apply our approach to the four largest metropolitan areas of the Netherlands. Our results indicate that for city centres, annual residential parking costs are around e1000, or roughly 17 percent of car ownership costs. Households facing a one standard deviation (e503) increase in annual parking costs own 0.085 fewer cars on average, corresponding to a price elasticity of car demand of about −0.7. We apply these estimates to gauge the impact of raising residential parking costs and the potential implications of automated vehicles.

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