There are two main sources of inefficiency in urban transport markets. Firs
t, transport prices fail to reflect the external costs of travel, notably p
eak-period external congestion costs. Secondly, a large percentage of drive
rs park for free, particularly at the workplace. Economic theory suggests,
in the absence of other market distortions, that efficiency can be restored
with a perfectly differentiated external cost charge in conjunction with r
esource-cost pricing of all parking spots. In practice, urban transport aut
horities can try various combinations of imperfect road-pricing systems and
imperfect parking charges. One example might be the use of a single cordon
charge to enter a city, together with a tax on workplace parking. In this
paper, we use a numerical simulation model of an urban transport market to
examine the efficiency gains from various parking policies with and without
a simple cordon system. As would be expected, we show that pricing of park
ing and road use need to be simultaneously determined. As the level of the
parking fee becomes more efficient, or as the number of free parkers is red
uced, so the level of optimally determined cordon charge falls. Additionall
y, by introducing a cordon charge, the level of the optimally determined pa
rking fee falls. The model results show that the second-best pricing of all
parking spaces produces higher welfare gains than the use of a single-ring
cordon scheme, though marginally lower than the combination of a cordon ch
arge with resource-cost pricing of parking spots.