Economic Analyses of Cars in the City: Implications for Policy and Automated Vehicles

Francis Jonathan Ostermeijer

Research output: PhD ThesisPhD-Thesis - Research and graduation internal

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This dissertation presents four empirical analyses on the urban economic effects of private vehicles. These analyses contribute to the current debate on urban and transport policy, covering topics ranging from the efficacy of hourly and residential parking prices, to the implications of in-vehicle distractions on road safety, and the long-term impact of cars on urban density. In each case, the empirical estimates are applied to improve our understanding of how automated vehicles (AVs) may impact our cities in the future. In cities, parking occupies a large share of land and is often provided to residents and visitors at prices below the market rate. According to economic theory, this causes excess car ownership and use; however, we lack well-defined quantitative estimates of these effects. Chapter 2 examines the effect of a large citywide increase in hourly on-street parking prices on parking and traffic demand in Amsterdam. Our findings indicate that the citywide increase in hourly on-street parking prices in 2019 of 66%, resulted in 9% fewer on-street parking arrivals and an overall reduction in traffic flow of around 2% - 3%. Chapter 3 focuses specifically on residents and examines how residential parking prices affect car ownership decisions. Our results indicate that for city centres, annual residential parking costs are around €1000, or roughly 17 percent of car ownership costs, and are more than double the costs in the periphery. Households facing one standard deviation (€503) higher annual parking costs own 0.085 fewer cars, corresponding to a price elasticity of car demand of about -0.7. This implies that the disparity in parking costs explains around 30% of the difference in average car ownership rates between the city centre and the periphery. These two chapters support the abundant theoretical literature, which indicates that parking prices are an integral part of urban transport policy. Chapter 4 studies how the rise in smartphone use over the past decade has impacted road safety in the Netherlands. Our results suggest that about 10% of vehicle accidents are caused by smartphone use and that these accidents mainly happen on urban roads. The findings imply that you are about 3.8 times more likely to cause an accident if using a mobile phone, which is larger than earlier field studies performed on data before the prevalence of widespread smartphone adoption. Chapter 5 studies the long-term effect of cars on urban density. Using a global sample of cities, we find that a one standard deviation increase in car ownership rates causes a reduction in population density of around 40%. This effect appears to be driven by expansions in the built-up area, suggesting that cars facilitate lower density development in the periphery. AVs are expected to result in improvements to accessibility and safety, increases in car demand, and a redistribution of people and jobs over space. Chapters 2 and 3 demonstrate how lower parking prices are expected to result in more traffic and vehicle demand within cities. Chapter 4 provides an indication for the potential safety benefits from AVs due to fewer smartphone distractions. Finally, Chapter 5 examines how increases in vehicle access and demand, due to cheaper and more comfortable car travel, are expected to impact urban population density in the long-run.
Original languageEnglish
Awarding Institution
  • Vrije Universiteit Amsterdam
  • van Ommeren, Jos, Supervisor
  • Koster, Hans, Co-supervisor
Award date13 Apr 2021
Place of PublicationAmsterdam
Print ISBNs9789036106498
Electronic ISBNs9789036106498
Publication statusPublished - 13 Apr 2021


  • cars
  • automobiles
  • cities
  • urban
  • parking
  • accidents
  • density
  • automated vehicles


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