ESPN Senior Writer Darren Rovell tweets seniorly:
The average price paid on StubHub for a ticket to tonight's college football playoff title game is $1,266. That's almost three times the price paid last year ($425)
In a well-functioning market there are only four possible changes, and resulting effects on prices and quantities, in supply and/or demand:
- Supply decrease (price rises, quantity falls)
- Supply increase (price falls, quantity rises)
- Demand increase (price rises, quantity rises)
- Demand decrease (price falls, quantity falls)
Tonight's game is being held at Raymond James Stadium in Tampa, capacity 65,890. Last year, the game was in Arizona at University of Phoenix Stadium, capacity 63,400. So we can rule out a supply decrease as the cause of ticket price increases--if anything, supply has increased and we would see downward pressure on prices, all else equal.
So demand must have increased between last year and this year--since the same two teams are playing, Alabama and Clemson. Why might demand have increased?
According to Google, it is 1,649 miles from Tuscaloosa to Phoenix, and 1,970 miles from Clemson to Phoenix.
It is 583 miles from Tuscaloosa to Tampa, and 573 miles from Clemson to Tampa.
Since travel is cheaper, demand for tickets has increased.