Envision you are a business in the First Hill neighborhood. You own a popular restaurant that relies primarily on customers driving from other parts of Seattle. You know the average customer group in your establishment stays for an average of 90 minutes (1.5 hours), spends $100, and you on average sees 100 customer groups (arriving in the same car) each day. Make a quantitative argument of how much an additional $1.00 increase in hourly parking rates would affect your business (assume the elasticities and estimates shown in the tables would be the same over this price range as well).

Generate a dollar amount estimate of how the parking rate increase would affect your sales. Come up with a number or numbers, show your work, and explain in words your reasoning how you came up with that number.

Hint: Elasticity = % change in outcome variable/% change in treatment variable

You can use this formula to come up with almost all the numbers you’ll need for #8 if you combine it with the values given in the question and the estimated elasticities in the tables, Revenue is simply price times quantity. Think how the parking rate change affect those variables.

Neighborhood	Rate 2010 ($)	Rate 2011 ($)	Rate Change ($)	Decrease Price Elasticities			Increase Price Elasticities
				Mean	Min	Max	Mean	Min	Max
Beltown North	2.5	2.0	-0.5	-0.21	-0.63	0.00
Belltown South	2.5	2.0	-0.5	-0.15	-0.59	0.00
Denny Triangle North	2.5	2.0	-0.5	-0.19	-0.64	0.00
South Lake Union	2.0	1.5	-0.5	-0.27	-1.02	0.00
Uptown	2.0	1.5	-0.5	-0.33	-0.99	0.00
Uptown Triangle	2.0	1.0	-1.0	-0.22	-0.68	0.00
Capital Hill	2.0	3.0	1.0				-0.45	-1.04	-0.29
Commercial Core	2.5	4.0	1.5				-0.34	-0.89	-0.03
First Hill	2.0	4.0	2.0				-0.39	-0.87	-0.14
Pioneer Square	2.5	3.5	1.0				-0.40	-0.88	-0.20
All neighborhoods with price changes				-0.23	-0.76	0	-0.40	-0.92	-0.17