Residential parking permits and parking supply

•We estimate parking supply functions for the Netherlands.•Parking supply in shopping districts is far from perfectly price elastic.•The annual welfare loss per residential parking permit is about €275.

We estimate welfare losses of policies that provide on-street parking permits to residents almost free of charge in Dutch shopping districts that are predominantly downtown. Our empirical results indicate that parking supply is far from perfectly price elastic, implying that there are substantial welfare losses related to underpriced parking permits. Our results suggest that the provision of residential parking permits in downtown shopping districts induces a yearly welfare loss of about €275 per permit, which is about 15% of the supply cost of a parking place.