Thursday, August 09, 2012

Markets in Everything: Tennis Pass Edition

Sharp-eyed reader DC sends this link.

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Excerpt:









A steep price increase for most permits required to play tennis on New York City's public courts has changed the game, pricing out thousands of players while creating shorter wait times for those who can afford to pay.

The Parks Department first served up higher fees for public tennis in 2011, doubling the prices paid by players between the ages of 18 and 61. Single-pay passes for an hour of court time jumped to $15 from $7, while season passes rose to $200 from $100.

Far fewer tennis permits have been sold under the new prices, according to data from the Parks Department. Sales of season passes for most players slipped by 40%, with 7,400 sold in 2011 as compared to 12,400 in 2010. (Only about 6,800 passes had been sold by the end of June 2012 to players purchasing unlimited court time for the year.)

Sales of single-play passes for this group of adults took a big hit as well, dropping by nearly a third from more than 40,000 for the 2010 season to about 27,000 last year.

Preliminary numbers through June show about 9,700 passes sold, though the Parks Department cautions that third-party vendors are still reporting sales and the number will rise.

Some longtime players say they made the decision that the cost is just not worth it. Christopher Farber, a freelance photographer living on the Upper East Side, no longer splurges on the season pass and has instead cut back his matches to about two a month, opting for single-use permits instead.

"I feel like $100 is a threshold," said Mr. Farber, who in the past played about 50 times a year at the courts in Riverside Park with partners he found through the website Craigslist. "I'm freelance and kind of get by every month, but even at $100 I can see myself buying a pass for the summer.'"

Interesting.   Tennis courts are most emphatically NOT a public good.  They are a club good, and can easily be provided as a club good (non-rival up to congestion point, but cheap to exclude).  Should the government even be in this business?  And if so, what is the "correct" price?

8 comments:

Natalie said...

I just don't even know where to begin. The person who doesn't realize they are now paying more because they are buying singles instead of the unlimited pass or that someone finds it problematic that a city agency found a way to increase revenue while decreasing wait times for a park facility.

G Wolf said...

Natalie - they decreased wait times by decreasing the accessibility of the park facility. Is that a good thing, in your mind, for a city government to do?

Mungowitz said...

Far be it from me to be reasonable, or a peacemaker.

But I think you are both right, Natalie and G. Wolf.

It's a legit question whether the city should be involved in the tennis business.

But if they are, why not raise price? The person who complained about the price increase, after saying he would switch to day prices, is kind of a nut.

And Natalie is also right that the city may simply be trying to ration access to a scarce resource. The story doesn't say.

BR said...

This must be about reducing healthcare costs since the availability of tennis court time encourages fitness. And healthcare costs are obviously a government concern. ;)

An ideal pricing strategy would most likely involve different rates for different hours of the week. If the cheap guy wants to play at 4A for like $3 then it should be a win-win.

The thing that irritates me is the 1 hour time slots. That has to be a gov't idea. You can only play about 1 1/3 sets in an hour, and you can never get any good if you only play an hour at a time.

G Wolf said...

My point was that it increases the excludability. If the city government is in the business of providing public goods, whether or not we agree that they should be (in general, or particularly about tennis courts), this moves the goods away from the "public goods" area of the rival/excludable grid.

Eric said...

Have the installed toll meters on the monkey bars at their parks yet?

Tom said...

Government is in the MONOPOLY business, with all the economic sense of garden slug. To increase revenue from the tennis courts, they really should plow them under and put up a business complex. But NO, someone would write letters!

What's the "correct" price of tennis in NYC? You cannot find out unless all the resources are in play.

Jim Oliver said...

The city should not be the tennis business but since it is, it should set the price to maximize profits. If is becomes very profitable perhaps more courts could be built. The city does have an advantage over private providers in that the do not pay taxes so that should be brought into the calculation for the city.