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.
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