Retailing regulation via parking taxation

Abstract

This paper explores the idea to regulate retailing industry through a tax on the store parking size. In Western economies, retailers use common resources (land use, road networks) contributing to the store accessibility that they do not pay for. This kind of free riding gives gross merchandisers and hypermakets a competitive advantage which establishes undue market power while creating, presumably, inefficiencies when social cost is taken into account. Hence the idea to tax the parking, which is a proxy measure of the accessibility resources used by the retailer. By using a standard model of horizontal differentiation, we explore the impact of parking taxation in a monopoly and in duopoly and we characterize optimal taxation policies.spatial competition, optimal taxation, parking