Economics in Real life- Amusement Parks and Touring Exhibitions

 

Many past posts have discussed the applications of economics in real life. The modus operandi in each post has been simple. Take an example from real life and discuss how economics consciously or subconsciously plays a role in the same. The events one observes in life are many and diverse. Each ins unique yet perhaps to a keen student of economics, these manifest in many possibilities of economics lies underlined in their demonstration. The current post too will take this forward and brings few more examples that add lustre to economics in life.

Real Life Practice/ phenomenon	Economics Linkage
Unlimited rides in Amusement Parks	In India, amusement parks came in much later and it is only in the last twenty odd years, they have spread to many cities. Any visitor to an amusement park would notice an interesting observation. They charge a fixed entry fee and offer unlimited rides for the visitors. One might wonder the reasons behind the same. The answer again lies in economics.   There is no doubt that once offered unlimited rides, the visitors might be tempted to take that ride again and again. This would imply others not getting chances to enjoy the ride. The queues might become longer thus making it unattractive for others. Yet as one observes, amusement parks are rarely unidimensional. They offer varying features and different rides each offering different thrill. In that context, given the time the visitors have at their disposal, they seek to experiment as many rides as possible.   As one observes in economics, it is about the equi-marginal principle. It is about the marginal costs that seek to weigh in the minds of the visitors relative to the marginal benefits. While they might want to enjoy a ride for the second time, they need to incur the cost, something that is measured in time lost for enjoying other rides. It is not just about the time spent in the ride but waiting time in queue while lining up for the ride. Therefore, the marginal benefits dictate the visitors seeking to enjoy as many rides as possible. Therefore the marginal benefits attained from each ride relative to time cost incurred on the last ride will be equalised across all the rides in the park. This logic predicates the decision of many amusement parks to charge single price for multiple rides.
Essel World and few amusement parks charging fares by height	A visitor to Essel World, one of the first amusement parks in India used to be greeted by an interesting phenomenon. The entrance fees was charged based on the height of the visitor. Those who were above a certain height had to pay higher amount, while those who were below a certain height were to pay half the ticket and some who were below lesser height mark would be charged free. This is of course as economists know an example of group based discrimination or third degree price discrimination. The question one might wonder however why the height based discrimination is.   At one plane it might be about the identification of children and adults. Since most are likely to be youngsters visiting the park, there is a possibility of some pretending to be school students or below a certain age and pay half-tickets. If there is a measurement based on height, this would not be possible. School kids will obviously be lower in height and thus eliminate ‘false-age’ claims. Those who are obviously above age would also be taller and thus would have to pay full fares. Yet there would be a lacunae.   There are many who perhaps are very short even when they grow into their adulthood. There are quite a few who perhaps are taller even though in terms of age, they might be young. There is no doubt that certain adverse selection events might occur wherein the younger ones pay more money for their genetics favouring height and some might pay less money even though they are older because of their genes making them vertically challenged. But perhaps for the amusement park in general, the cost benefit analysis might be skewed in favour of the height based discrimination. Perhaps there are rides which demand minimum height and thus many would be ineligible for the ride. The park management might want to ensure they do not get charged for those rides and thus ensure they pay only the amount that makes them eligible for those rides where no height restriction exists.
Touring exhibitions charging one entrance fee plus additional charges per ride	While amusement parks might be charging an uniform entrance fee and offer unlimited rides, touring exhibitions offer single ride per ticket. This seems contrary to the logic, yet there might be some inherent benefits to the same. It is perhaps that they cater to an audience which is very different from the audience in the amusement park. Since amusement parks are permanent and are located in few cities, they attract both locals and outside visitors. The touring exhibitions too attract nearby villages and towns but generally are temporary before shifting to a new destination. The visitors are likely to crowd in at certain points of time rather than through the day. In fact, the touring exhibitions might be open for a limited time period may be post 4.00 to 9.00 or so on working days. This means the number of footfalls will be higher per hour relative to the amusement parks where they might be diffused. Thus there is an incentive to add to congestion pricing to these entertainment outlets. They could strictly say one ride per person but might be difficult to enforce besides someone who is ready for more, naturally creates a question why should not they be allowed. This makes them adopt this mechanism. Those who want to enjoy more ride would pay per ride, thus there is additional revenue for the exhibition management besides adding an explicit cost. Furthermore the number of rides are relatively less in these exhibitions compared to the amusement park thus making it feasible for riders to experiment with more than one ride and still seek multiple rides for each. Thus both the diversity as also the time constraints make them adopt this strategy.

 

 

The examples illustrated above, to reiterate once again represents a tiny fragment of how economics covers in daily life. When one visits the exhibition or an amusement park and enjoy their ride, they can think of economics at play. While of course economics would be at the backburners but to a keen mind in economics, this would not go missing.  As Robert Frank would put, it is the economic naturalist at work.