Thursday, October 15, 2009

Santa Monica Embraces Smart Public Policy!

Santa Monica drivers will soon be paying much more for scarce parking spots . Will city revenue rise? Will bus ridership rise? Will travel speeds increase? Will air quality improve? Will fewer shoppers appear to go shopping on 3rd street?

I hope that this experiment serves an educational purpose of demonstrating what life could be like under a more rational pricing scheme. To loosely quote Don Shoup, free parking ain't free. Will other cities learn from the Santa Monica experience? Will there be a sharp push back and rebellion? Economists have not been smart about modeling how we move from an inefficient political equilibrium (low parking pricing) to an efficient equilibrium. How long does this transition take? Are there any "evolutionary" means to accelerate this process? I would say yes, through experimentation and learning we can be more optimistic that good ideas won't remain untried forever.