Comment 116672

By kevlahan (registered) | Posted February 29, 2016 at 15:07:00 in reply to Comment 116670

When municipal lots are priced 50% cheaper than similar private lots, that is a direct subsidy to drivers by the municipal government. It is also interfering in the private parking market by introducing an artificially low government competitor.

It is also a subsidy with respect to transit users in the sense that the municipal government (which controls both prices) has priced parking much cheaper than taking transit, thereby favouring driving over transit as a way of travelling to downtown.

t is similar to situations where one similar good is taxed lower or higher than another (e.g. countries like the UK where diesel for farmer equipment is taxed at a lower level or where ).

The naive definitions of subsidy you quote don't include many cases that economists define as subsidies. We are talking about economics, not the everyday colloquial use of the term. See for a more complete definition of subsidies.

Increasing the cost of driving certainly will reduce the amount driven: driving is not immune to the basic principles of supply and demand.

Comment edited by kevlahan on 2016-02-29 15:07:37

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