An Economist Buys Tickets to Homecoming

An Economist Buys Tickets to Homecoming

Like any good that exists within a market, tickets to Northside’s annual homecoming tickets have various attributes, including supply and demand. In this case, supply is basically limitless – Student Council will sell as many tickets as they possibly can. Of course, we don’t end up with an infinite number of sweaty teenagers packed into the gym every spring: the number of tickets sold is limited by the demand for tickets.

Much of Student Council’s budget is reliant on revenue from these ticket sales, so I set out to survey students about their willingness to purchase homecoming tickets. I asked each respondent, “What is the most you would be willing to pay for a ticket to Northside’s Homecoming?” I received a total of 36 responses, shown in the sheet below.

The data demonstrates that homecoming tickets are an inelastic good – as price increases significantly above $15, students are not willing to spend the extra money on tickets. The line has a steep negative slope, indicating that if price moves, quantity, too, moves quickly:

Tickets are normally priced at $15, relatively low as far as Homecomings go. While respondents were not directly informed of this, I suspect a few of them remembered that amount, which accounts for the seemingly artificial increase in quantity at $15.

When the data is simplified to a three-point model, focused around $15, the elasticity of the tickets becomes more clear. We see that the graph has a steep downwards slope, and any movement away from $15 results in a loss of revenue:

This indicates that student council has effectively priced the tickets to maximize revenue, however, it is worth nothing that this may be a result of respondent’s prior knowledge of this price. At the very least, this indicates that the respondents thought the tickets are priced fairly.

Given the opportunity, I would repeat this survey on a larger sample size, and would incorporate split testing. Group A (1/3rd of total respondents) would be informed that tickets are normally $15, Group B would be informed that tickets are normally $10, and group C would be informed that tickets are normally $20. This would allow me to normalize variations created by the knowledge that tickets were previously priced at $15, resulting in a more complete analysis of actual consumer disposition.

For now, though, it looks like Hoco tickets will once again be priced at $15.

Ziggy Ziegelmueller

Justin Ziegelmueller

Aspiring Architect

rss facebook twitter github behance youtube mail spotify lastfm instagram linkedin google google-plus pinterest medium vimeo stackoverflow reddit quora facebook twitter linkedin pinterest google-plus reddit rss facebook twitter github behance youtube mail spotify lastfm instagram linkedin google google-plus pinterest medium vimeo stackoverflow reddit