What World Cup Ticket Prices Tell Us

Like the airlines, the World Cup does dynamic pricing.

As a result, ticket prices tell us more than the cost of seeing a game.

Dynamic Prices

The story of dynamic prices began several years after the 1978 Airline Deregulation Act when one Delta executive became horrified that his reservations staff had lowered fares for the Atlanta/Washington D.C. route as the departure date approached.

I suspect I would have lowered those fares also. If you have empty seats, it makes sense to attract more fliers by lowering the price. The right approach though was precisely the opposite. The airline should have been increasing fares because last minute fliers are willing to pay much more.

Now a slew of industries realize they can charge consumers differently through dynamic pricing.

For the World Cup’s 104 matches in 16 cities, those prices also tell us about a team’s popularity.

World Cup Ticket Prices

Last September, FIFA told us that initially, tickets would range from $60 to $6,730 while one hospitality ticket could cost as much as $73,200.  However, all of that would change once sales and resales began.

Through an AEI paper from three economists, we can first gauge host country popularity by the premium in resale markets that the host country’s team tickets attracted (or were predicted to attract) above the cheapest ticket:

• Mexico (+$623)
• U.S. (+$571)
• Canada (+$231)

Football legends Lionel Messi and Cristiano Ronaldo also boosted ticket prices for their home teams:

• Argentina (+$312)
• Portugal (+$442)

Then we have other teams that have considerable appeal:

• Brazil (+$299)

And finally, the venues have a premium:

• Miami: (+a whopping $1,000)
• Guadalajara and Mexico City (+$800)
• New York and New Jersey (+$500)

By contrast, dynamic prices and demand and supply brought European ticket prices down for teams from France, Germany, the Netherlands, and England. And similarly, ticket prices for West Coast games were below their original prices:

San Francisco (-$346)

Our Bottom Line: Price

A price is a handy source of information. In a market system, when prices freely fluctuate, they send a message. On the demand side, a price tells us what is cheap or expensive, well-made or popular. On the supply side, prices let producers plan for profits.

For the World Cup, they signal popularity.

My sources and more: Most of today’s facts were from the NY Times and AEI.

Please note that several of today’s sentences were in a past econlife post.