The Effect of Changing Distance From Toronto's Central Business District on Parking Prices.

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The Effect of Changing Distance From Toronto’s Central Business District on Parking Prices

Aakash Dheer

IB HL Geography Extended Essay

Mr. Derek Poon, Advisor

3766 Words

Introduction        

Toronto, Ontario, Canada is one of the most culturally diverse metropolises in the world, with a population of over 4 million people, and a downtown area wielding much of Canada’s financial, political, and educational power (United Nations). With many attractive factors, such as business and employment opportunities, entertainment and shopping districts, and the availability of transportation in such a small area, downtown Toronto is quickly becoming very densely populated, with a population of 670,000 people in an area of under 100 square kilometers (Statistics Canada). This population density of over 7000 people per square kilometer will in turn affect demand for housing, services, and parking (Statistics Canada). A fundamental concept of economics is that as demand for a good or service increases, the price of the good or service will increase as well (Parkin). Therefore, in an area with more people living in it, the demand for parking will be higher than a less densely populated area. As a result, the most densely populated area of the city will be the most expensive. In Toronto, this location is the downtown Central Business District (CBD) area, meaning the highest prices for parking will be located inside of the CBD (Wakefield). One of the prime commercial locations in Toronto is the intersection of Yonge Street and Dundas Street, (heretofore referred to as the YDI) which is surrounded by instantly recognizable retail stores,  major shopping centers, restaurants, and skyscrapers; all are features that make the intersection truly valuable, at least in the geographic sense. As one moves away from the YDI, however, the height of the buildings decreases, the frequency of recognizable brand name stores lessens, and the sense of being in a densely populated downtown area rapidly diminishes. The characteristic of decreasing building height is relevant because at the core of the CBD, competition for land results in higher rent prices and businesses must therefore be more productive by maximizing land space (Waugh). On a limited expanse of land, the only way to do this is to build upwards, so taller buildings within the CBD will indicate a more economically prosperous area (Wakefield). Because of these immediately recognizable changes in the visual characteristics, it was decided to investigate if the spatial changes in the areas affected the financial aspects. Therefore, the topic selected was “The Effect of Change in Distance from Toronto’s Central Business District on Parking Prices”.

Picture 1: Downtown Toronto

Methodology

        All parking lots within a distance of 1.5 kilometers North and South on Yonge Street and East and West on Dundas Street will be taken into consideration in the investigation by using line sampling. The area of investigation is only 1.5 km because this study aims to determine the changes in parking prices within the CBD, and selecting a larger area will result in an area of investigation beyond the reach of the CBD. By being sure to evaluate all possible alternatives to parking directly at the YDI, given that they are within the indicated distance, it is ensured that no unintentionally arbitrary selection of parking lots will affect the confirmation of the hypothesis.

        Data on parking prices will be recorded for the daytime hours (7:00 AM to 6:00 PM). Although this may seem like a surefire recipe for an incomplete investigation, municipal parking lots and private parking lots have varying pricing schedules. Some offer only an hourly rate, others have a one weekday and one weekend rate, but virtually all of the parking lots have a daily maximum rate - parking from 7:00 AM to 6:00 PM. Using this almost universally accepted time span will allow for maximum consistency when evaluating parking lots that are owned by different companies.

        Also, the hours specified above include the beginning of morning rush hour and the end of evening rush hour, and allow for understanding of the effect that the large number of office workers that commute into the CBD for work everyday have on demand for parking, which eventually leads to a change in prices.

        Parking lots will be divided into four groups (North, South, East, West), based on

their direction from the YDI, and data analysis will be done for all parking lots together as

well as for each group separately to determine the variation in price changes for movement

in each direction. The reason is that in the Southern direction, the Harbourfront may cause

anomalous results for the change in prices. The geographic models to be used will be the

Bid-Rent Theory, which relates distance from the CBD to rent prices (adapted for this

study as distance versus parking prices). The statistical test to be applied to the data will be

the Spearman’s Rank Correlation, which calculates the strength of the relationship between

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two variables and determines the probability of the relationship occurring by chance. Also,

validity of the results is increased as there are no assumptions made.

Map 1: Area of Investigation

Hypothesis

        For the East, West, and North transects, it was predicted that as distance from the YDI increases, the price of parking from 7:00 AM to 6:00 PM in any parking lot will decrease by 50% per kilometer. Therefore, the price of a parking lot 1.3 kilometers from the YDI will be half the price of a parking lot .3 kilometers from the YDI. ...

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