Monday, 7 March 2016

Paid parking and the value of student time

I'm back at work after a week away at my son's school camp, and the first thing I noticed when I arrived was... the amount of spare parking in the Gate 10 car park. In contrast, the streets leading up to the car park (e.g. Carrington Ave) were thronged with parked cars. It's interesting what a large effect on behaviour a small change in incentives can have.

I've written before about the introduction of paid parking on campus. Increasing the monetary cost changes the incentives for those who were previously driving to campus. Some will choose to walk or cycle or take public transport. Others will continue to drive, but park on suburban streets rather than in the car park. The choice a rational (or quasi-rational) person will make will depend on the costs and benefits of the different options. Assuming the benefit is the same regardless of how they travel (the benefit being that they get to campus), whichever option presents the lowest cost will be the option the driver will choose. Costs may be monetary, or time or inconvenience.

Thinking purely among those who continue to drive to campus after the introduction of paid parking, the choice of whether to park on-campus (and incur the parking fee) or park on a suburban street (and incur no fee, but face extra walking time) has interesting implications for the value of student time. Let's take the example of students parking on Carrington Ave, in preference to Gate 10. Carrington Ave is about an extra three minutes of walking time from campus, compared with the Gate 10 car park. By parking there though, a student saves the $2 parking fee. So, that implies that the $2 saved must be at least as valuable to these students as six minutes of walking time (three minutes each way). In other words, students who park on Carrington Ave are suggesting that their time is worth $20 per hour (or less) - if their time was worth more than $20 per hour, it would be less costly for them to park in the car park and save the six minutes of extra walking time instead.

In contrast, students who park in the Gate 10 car park must value their time as being $20 per hour (or more). If their time was worth less than $20 per hour, they would be better off parking on the suburban street (and incurring the extra six minutes of walking time instead).

Of course, the analysis above is simplified. I haven't taken into account the possibility of parking fines for Carrington Ave (I don't think it has time limited parking... yet; but when it does that will increase the potential costs of parking there), and the offsetting health benefits arising from any extra walking. But I think the overall point still stands - the choice of where to park provides us with some clues as to the value of student time.

So, when considering how much to pay my teaching or research assistants in the future, perhaps I should be inquiring whether they park in the car park or on the street, to see what they think they are worth?

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