Trading car park tickets; economics and community

I’m about to do the stereotype blogger “A funny thing happened at the supermarket” thing, so please bear with me. It’s the only one so far.

Round our way, there’s a council-owned car park behind the Tesco, and the tickets are sold for fixed periods (1 hour, 2 hours, whatever). A custom has grown up of people who have completed their shopping within that time offering their used tickets to people coming in. It struck me that this was an interesting economic phenomenon. Now, the first part of the analysis is pretty simple. If the council can set the unit in which they sell parking time, then they can effectively sell the time several times, given that at least some of the parkers will leave before their time is up. This is an economic rent to the council and a deadweight loss to society, as it’s an incentive to use parking less efficiently. It’s no surprise that a) the tickets are marked “non-transferable” or b) that a secondary market has arisen.

If the parkers who have surplus time give their tickets to others, the free parkers are in effect getting the equivalent of the council’s economic rent back. Also, society’s resources are slightly more efficiently allocated (fewer people are paying for nothing). The problem is that the tickets are not traded but given away. Where is the incentive for the person who actually bought a ticket to give it away? I have two explanations. One is that you give the ticket away in expectation of a deferred benefit; as the whole thing depends on tickets being given away, doing so today increases the likelihood that you may get a free one tomorrow. The alternative, more of a Richard Layard answer, is that you gain utility from the satisfaction of helping others (and indeed of outwitting authority) and taking part in society. Likely, both are in operation.




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