Solving school enrolment and on-street parking problems with economics

As an economist, it’s frustrating to see the same issues recur because our decision makers fail to recognise and adopt the straightforward solutions suggested by economics, solutions which take advantage of the so-called price mechanism or market forces. 

First, consider the latest school enrolments story involving popular, academically high-performing state high schools such as Brisbane (“State High”) and MacGregor: Qld’s most-crowded schools enrol hundreds of kids from outside catchment. As I argued in my 2018 post on the Dutton Park high-rise high school, the state government should consider charging a reasonable fee for out-of-catchment enrolments (offering some exemptions for the academically or athletically gifted). Here’s a sample of what I wrote in 2018:

Having a large number of students wanting to attend State High shouldn’t be viewed as a problem, but as an opportunity. The state education department is missing out on an opportunity to raise revenue and to manage demand for places at the school at the same time. I expect it could raise parental contributions to State High to levels similar to private schools (e.g. $20K+ p.a. for Brisbane Grammar) for many families no longer living in the catchment… Imposing additional fees on out-of-catchment students would help manage demand and could help finance the augmentation and refurbishment of infrastructure at the school.

The second story which has annoyed me recently is the story in yesterday’s Sunday Mail regarding on-street parking in Eight Mile Plain: Eight Mile Plains parking: Cr Steven Huang threatened. The Sunday Mail article noted:

Residents on Brisbane’s southside – fined for parking in their own streets – are furious while the local councillor is being targeted with threats of violence. Police are now involved as the suburb threatens to erupt…

…the installation of the [no parking between 7-10am on weekdays] signs were necessitated by clients, staff and visitors of the nearby Brisbane Technology and Garden City Office parks using the residential streets as free parking during the week, choking the narrow thoroughfares…

Although the restrictions appear targeted at commuters, they are upsetting locals who now can’t park their cars overnight on the street (unless they leave for work by 7am).

This story is a good illustration of the high cost of free parking which was identified by US economist Donald Shoup, and which I’ve written about on QEW before – e.g. in BCC residential parking permit zone in West End & Highgate Hill is bad policy. Economics provides a simple solution: simply charge for parking in the neighbourhood and let whoever values the car parks the most pay for the right to park in the spots. While the council does need to consider impacts on the flow of traffic, I expect the optimal amount of on-street parking in the neighbourhood during 7-10am on weekdays isn’t zero. Local residents would complain about having to pay to park on the streets in their own neighbourhoods, but they should recognise the streets outside their houses are owned by the whole community rather than themselves alone.

Finally, I should note that, while these solutions are obvious to economists and will lead to much more economically efficient and rational outcomes, some people benefitting from current arrangements would be worse off, and the solutions may be at odds with notions of fairness held by many in the community. As with many policy questions, value judgments come into play. But our decision makers should at least consider using the magic of the market to solve these perennial problems.

Please feel free to comment below. Alternatively, you can email comments, questions, suggestions, or hot tips to contact@queenslandeconomywatch.com.

This entry was posted in Uncategorized and tagged , , , , , , , . Bookmark the permalink.

2 Responses to Solving school enrolment and on-street parking problems with economics

  1. Michael Willis says:

    Some excellent suggestions, thank you, Gene.
    As usual, self interest overrides sensible economic policy and confuses debate in many areas.
    There are so many public goods and services problems that can be addressed with effective pricing policies.
    Particularly with modern data capture and analysis, we can adapt pricing models to account for variables like “capacity to pay”. The recent change to non-government school funding is a great example of this ability to nuance our service funding/pricing for government services and assistance.

    Some other suggestions, based on simple economics, that might help solve a range of problems without disadvantaging those who cannot afford to pay:
    – Car parking in cities, suburbs, and around public services (eg:hospitals, business centres). Why not charge a fair price, based on demand on certain daily cycles, and rebated for concession card eligibility? Like we do for public transport already. Why should I get a free on-street carpark, when I live in a near-city apartment – subsidised by struggling ratepayers in outer suburbs?
    – Public schools, whether for families within or outside catchment areas. Why should the “price” for enrolment in good public schools be captured by property owners, when the government could charge for enrolment? Again, pricing can be adjusted on the same basis as the new funding model for independent schools, with disadvantaged families getting “free” pricing and wealthy families paying a fair price. Families would be given an annual “voucher” based on capacity to pay, that could be cashed in at any school of their choosing. Wouldn’t that fire up the quality of our schooling, with some parental choice – regardless of income or wealth?
    – Free public services, like healthcare and ambulance services, could have a price, that is differentiated for capacity to pay. Free for pensioners, but priced accordingly on a sliding scale, for those with ability to pay and/or with private health insurance. Long hospital waiting lists might disappear overnight! And again, consumers would have some hospital and healthcare choice.
    – Pensions could be better tailored to adjust for wealth capacity. For example, we could cap the value of the family home for the pension assets tests, based on an agreed proportion of the local average property value. That would stop the property millionaires in wealthy suburbs being subsidised by the taxes of struggling workers, as they are now.

    We have a major challenge, post-pandemic, to balance budgets of governments at national and state levels. The micro-economic reforms suggested above could deal with major challenges in our public services, and help reduce government debts.
    And it could be done with fairness to those on low incomes and with other social disadvantages.
    With the technologies available now, we have a great opportunity. What we need is the same level of political willingness that we saw from national governments (of both sides) in the 80s and 90s.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s