“How Much For Parking???”
I enjoy the Bernie Miklasz show on 101 ESPN FM and 101sports.com. I also enjoy his writings in the St. Louis Post-Dispatch. But the other day, while listening to his show on the way back from lunch (I think it was last Friday), I heard him complaining about parking lot operators in downtown St. Louis raising prices during the baseball playoffs. This, of course, is flabbergasting to someone like myself. Why, on God’s green earth, shouldn’t parking lot operators raise prices in response to increased demand for parking brought about by the playoffs?
There really is no legitimate argument against it. There might be legitimate gripes or complaints against it, but those aren’t arguments. Every person reading this, or listening to Bernie’s show (probably more of the latter), would – if they owned a parking lot downtown – raise prices in this situation. Parking for sporting events like this is an example of market-day supply, like the fish market in your economics textbook. The supply of parking is fixed for any individual baseball game. With the increased attendance for the playoffs (the dominant, but not only, factor, increasing demand here), the demand for parking increases. Because the supply of parking is fixed, prices will increase. This will happen in every situation everywhere, and there is nothing wrong with it. (Note: the supposition that the supply of parking is fixed in a single day is correct, but there might be some exceptions. You can’t build a new parking lot in a few days because the team makes the playoffs. However, some things could be added to the supply in response to high demand. For example, a private parking lot may open itself to the public in response to high demand and high prices. That, of course, would result in more supply and lower prices.)
None of this says that parking lot operators are taking advantage of monopolistic power. People have plenty of choices here. Parking farther away from the stadium will still be less expensive than parking closer. If you are willing to walk further, you can save money. You can carpool and share parking expenses. You can take a bus or Metrolink. If parking lot operators set the price at $1,000 per spot, they won’t sell many spots. Every parking operator is going to set the price at a level they think will result in selling all their spots for as much as they can. If they set their prices too high, they will lower them quickly as market equilibrium sets in.
Of course, Mr. Miklasz would do the exact same thing with his show and column. If his ratings skyrocket, he wil increase the advertising rates for his show. Now, he might not be able to increase his rates today in response to more listeners during the playoffs. But that is not because he is behaving morally and parking lot owners immorally. It is likely because he has chosen to sell long-term advertising agreements with customers for so many spots over a period of time because that is the best way for him and his station to operate. The parking lot operators who service the ballpark are not under such constraints.
If Bernie was to say, write a terrible book that for some strange reason millions of people buy and it becomes a terrible movie, he will demand a raise from his employers. If they don’t give him the raise he feels he deserves, he can write more terrible books and make money that way. If he has enough time and desire, he can try to do all of these things at once. But he will sell his services, and the various items that accompany his services (ad rates, etc.) for the highest price he can based on the ever-changing market conditions.
The parking lot operators do the exact same thing. There is absolutely nothing wrong with it.