The dismal science of ticket prices
Expect to pay more for tickets for Dave Matthews concerts in the near future, predicted Alan Krueger, the world's first and foremost professor of Rockonomics, the study of the economics of ticket prices at a lecture Monday sponsored by the Wilson School.Krueger, who holds a joint appointment in the economics department and the Wilson School, noted a trend of rising ticket prices in recent years at a lecture "Rockonomics: The Economics of Ticket Pricing."Incorrectly priced tickets, new technology, more intricate and eccentric stage sets and pyrotechnics all contribute to elevating production costs, which in turn lead to higher ticket prices, explained Krueger, the Bendheim professor of economics.He analyzed the reasons for the discrepancy between the actual and the market price of tickets, why some bands charged more than others, and the reasons behind the recent price growth trend.The availability of free music over the Internet has led to a decline in record sales, which in turn has forced bands to raise ticket prices, he said.If correct, this would help to account for the price growth from 1996 to 2001 of pop and rock concert tickets by 74 percent while with less heavily pirated music, such as jazz and blues, the ticket prices grew only by 24 percent for the same period of time, Krueger explained.For music concerts, ticket prices, on average, increased by 62 percent while the cost of living rose by nearly 13 percent over the last six years.Krueger explained that if the demand to hear the best is higher, then the rewards for the best should also rise ? and higher band recognition has usually meant higher ticket prices.The increased demand for name bands has come as the price of consumer audio equipment has fallen by a third over the last two decades, making people more knowledgeable about bands playing.