The Ticket Black Market

The Black Market for tickets

Ever since live music and sporting events started selling tickets, the act of buying those tickets legally and attempting to resale them, typically by a direct or persistent approach (known as touting) has been thriving. Even though the act of touting is not in itself illegal, there is a growing outcry over vastly inflated event ticket prices caused by the secondary-ticketing market. Touting is a problem at every gig, sports event and convention but an obscure favorite example of mine is touting at Wimbledon.

It's no secret that Wimbledon is the most exclusive and premium tennis championship in the world so it's barely a secret that there is an exclusivity of court tickets for the tennis fortnight. However, this sheer exclusivity of show court tickets drives demand and
hence profit margins through the roof. You can already hear the touts licking their lips. After all, this is an event where every year, thousands camp on the streets for the chance to buy centre court tickets.

"Working the streets is a fairly easy way to make quick money," said one regular tout who spoke to VICE Sports on condition of anonymity. "There's so many people willing to pay five or 10 times the regular price of a ticket in cash, especially as the tournament goes on. First or second round centre court tickets go for a few hundred while the cheapest men's finals tickets are worth around £175, but you can sell them for a grand or two without a problem. Online you can get far bigger profit margins."
In addition to this, Wimbledon issues several hundred No.3 and Centre court tickets every day to its online ticket supplier Ticketmaster, with the intention of making the tickets more accessible to those who are unable to queue or did not succeed in the ticket ballot for the event. 

Touting and the secondary-ticketing market causes many problems for consumers and fans of these events as the resale of tickets at inflated prices puts them beyond the reach of the audiences for whom they were intended, such as supporters involved in a sport, or fans who follow particular artists. Another example is that the consumers lack protection, e.g. they may have inadequate or misleading information about the location in the venue and face value of the ticket (if it exists at all), and what terms and conditions apply to it (including conditions restricting transfer and allowing cancellation of tickets transferred in breach), and they may be unable to obtain refunds when events are cancelled.

The effects of touting not only hits the consumers and fans but it also hits the producers, promoters and even governments. profits taken by the secondary market have direct and indirect effects on revenue for promoters and performers, e.g. promoters may be deprived of revenue when, for instance, tickets sold at a discount are sold on at face value or above; performers lose out because their fees are based on face value ticket sales; resale of tickets at inflated prices reduces the amount consumers are willing to spend at events or on tickets for other events; resources (both financial and administrative) have to be diverted to anti-touting measures including the cost of police(affecting the government budget and the tax payers) and extra stewards. in addition, touting may affect the country’s ability to continue to attract world-class events for instance the Rugby World Cup in 2015 and Football World Cup in 2018, for which bids are being prepared (and there is an increasing trend by international governing bodies of sports to write into bid requests that host nations must control ticketing in similar terms to those that exist for the Olympic Games)

In an attempt to crack down on street touting in the past three years, the local councils around Wimbledon announced a plan to transform the All England Club and the zones around Southfields and Wimbledon Park tube station into tout-free zones, via stricter monitoring in partnership with the Metropolitan police. Anyone caught selling tickets on the streets faces immediate arrest, while anyone suspected of doing so can be ordered by police to leave the area for 24 hours, or else face arrest. Fans who are believed to have purchased a ticket from a tout or secondary sources can be refused entry. However, many touts have simply responded by taking their business online, selling their tickets via websites such as Gumtree, Viagogo and StubHub.

Sources

https://sports.vice.com/en_uk/article/inside-wimbledon39s-black-market-ticket-trade-uk-translation

https://www.theguardian.com/money/2016/may/21/ticket-tout-criminalised-inflated-prices-secondary-ticketing

https://www.publications.parliament.uk/pa/cm200708/cmselect/cmcumeds/202/202.pdf

Portugal's Ghost Highways

Since joining the European Union 30 years ago in 1986, Portugal has built over 2700 KM of new highways and over 3200 KM of other main roads, particularly to connect north Portugal with the south. Much of this investment into the extensive network of roads was funded by a big slice of the 96 billion euros Portugal received from the EU Structural and Cohesion fund since 1986. This vast highway network has shortened journey times across the country and removed many rural communities in Portugal from isolation meaning that the country is more accessible and connected. Also, the new highways have contributed a significant reduction of deaths and in road accidents due to better infrastructure and safer roads.

However, in 2010 Portugal was hit by a great recession which led to the country being unable to repay or refinance its government debt without the assistance of third parties. A 79 billion euro bailout was put in place by the EU and IMF but Portugal struggled to with the terms which only made the recession worse. 

According to INRIX, a global company which provides a variety of Internet services and mobile applications pertaining to road traffic and driver services, road traffic in Portugal has fallen by 50% in 2012 which is more than in any European country at the time. This is because many motorists, hard-pressed by the recession and tough austerity measures, cannot afford to pay the toll charged to use all Portuguese Highways. And controversially, in 2012 the Portuguese government introduced new tolls on 100s of KMs of road that were previously free to use. This left many motorists no choice but to leave their cars and use public transportation instead. Gonçalo Torres, an events manager, and usual highway user states that "People don't have money to spend on motorways. It costs me more in tolls to drive to Lisbon from Castelo Branco [220 KMs] than it does in diesel. The model aimed at developing Portugal from north to south worked initially, but, unfortunately, anyone now traveling on secondary roads will see how busy they all are". 

Many firms and car owners struggle to cover the costs of fuel, insurance, and tax alongside the costs of the tolls, forcing a considerable amount of people to take their vehicles off of the road altogether and causing a plummet in car sales, leaving many of Portugal's highways empty and ghost-like. This decrease in sales means that there will be a decrease in production of cars and an increase in unemployment as fewer people are needed to sell cars which will cause further economic decline and prolong the recession. 

According to international standards and Portugal's own national road plan of 2000, a highway needs traffic of at least 10,000 to 12,000 vehicles a day to justify its construction. However, there are at least nine highways in Portugal where traffic is below that level which emphasises that the development of these highways was not needed and that in fact, they are redundant. The public opinion of these highways is that too much money was spent on concrete and tarmac and too little of education and professional training.

Even though these roads reduce journey time and make Portugal one of the most developed countries in terms of road infrastructure in Europe, they come at a cost. The potential opportunity cost of not investing most of the 96 billion euros from the EU on developing the road network would be that the Portuguese government would have a lot more money to invest into education, building factories with better technologies and supporting Portuguese industries and manufactures as this would improve productivity and international competitiveness which would increase economic growth and ultimately help Portugal avoid its 2010 recession.

Fracking in the UK

                                 Fracking and the UK

In this article, we'll be looking at what Fracking is, why it's becoming a more commonplace word in Britain and discussing the short term and long term effects on the economy.

What is Fracking? 

Fracking is a process which involves drilling down into the earth and injecting shale rock with a high-pressure mixture of water, sand, and chemicals to release the gas inside which allows the gas to flow out to the head of the well. The process can be carried out vertically or, more commonly, by drilling horizontally to the rock layer and can create new pathways to release gas or can be used to extend existing channels. The term fracking refers to how the rock is fractured apart by the high-pressure mixture.

Is Fracking happening in the UK?

More than 100 licences have been awarded by the government to firms in the UK, allowing them to pursue a range of oil and gas exploration activities in certain areas. But before firms can begin fracking they must also receive planning permission from the relevant local council. However, in 2013 The British Geological Survey estimated that there may be up to 64 trillion metres of shale gas stored in 'Bowland Basin' which is under Lancashire and Yorkshire in Northern England. So, is fracking happening in the UK? Currently, no but earlier this year on the 23rd of May; the North Yorkshire county council's planning committee approved planning permission submitted by the company Third Energy to frack at a site near Kirkby Misperton, North Yorkshire. This gives Fracking the go-ahead in the UK for the first time since 2011 and with more planning permissions being  submitted to local councils, it is likely that fracking has a future place in the UK.

What are the Benefits of Fracking?

• Gas in the United Kingdom would become cheaper and cheaper as Fracking increases – Because of its abundance in Northern England, gas would be a lot cheaper than it would have been a few years ago if fracking took place in many shale-rich areas of the country. This prediction can be backed up as in 2013, The USA experienced a "Fracking Revolution" which saw the price of gas fall from $8 to $3.32 per mcf (thousand cubic feet in 2013 prices)  as the demand for gas dropped and supply increases.

The U.S. fracking revolution has caused natural gas prices to drop 47 percent compared to what the price would have been prior to the fracking revolution in 2013

• Due to the Cheaper gas prices caused by increase supply, gas will replace most other fuels to produce electricity meaning electricity will be produced and sold at a cheaper price emphasising that people's heat and electricity bills will be significantly less. The low price of gas could also potentially increase consumer  surplus in the UK, Consumer surplus is a measure of the welfare that people gain  from consuming goods and services and is defined as the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e. the market price). A consumer surplus occurs when the consumer is willing to pay more for a given product than the current market price. 

• Investment into UK fracking would also have a positive income on employment in the industry. In 2013, the Institute of Directors predicted that some 70,000 jobs might be created and supported by the fracking industry. This means that unemployment will fall in Britain meaning that more people will be making an income which will help boost the British economy. 

We have more time to adapt – Fossil fuels are a non-renewable source of energy: we have known this for many years. However, we are not yet ready for them to run out. In order to give us more time to research safe and effective ways of powering our cars, heating our homes and cooking our food, we can now use this surplus of gas thanks to fracking.

What are the costs of Fracking?

• In 2011, energy company Cuadrilla suspended test fracking operations near Blackpool, in Lancashire, after two earthquakes of 1.5 and 2.2 magnitudes hit the area. A subsequent study found it was "highly probable" that shale gas test drilling triggered the tremors. A government-appointed panel said there could be more tremors as a result of fracking, but they will be too small to do structural damage above ground. However, even though the tremors would not cause damage above ground, the tremors would lower the quality of life of the people who lived around these fracking areas and experience the tremors. 

Water Pollution -  Because water that is full of dangerous chemicals is pumped into the ground in huge amounts (around 100 times as much as in the usual gas extraction techniques previously employed),In America, more and more problems are being found in and around areas where fracking takes place. The water that is pumped into the ground is supposed to be extracted after the process of fracking. However, sometimes it does not rise up to the surface but rather seeps through the ground towards other water sources like rivers, ponds and even the sea. The chemicals that are in the water mix can cause problems for creatures and plants living in the water or be relying on it for their survival. They can also cause problems for people who are drinking the water if the chemicals seep into reservoirs, for instance. This would also have a serious financial implication as the government would have to pay for the clean up and decontamination of contaminated water supplies. 

• Although burning gas does not cause as much carbon dioxide to be released from burning oil or coal, it does still release carbon dioxide into the air. If we are relying on gas rather than trying to find new, alternative energy sources that are cleaner and do not cause problems for the environment, then we are still adding to the amount of greenhouse gases in the air. In the long run, this could still have hugely problematic effects on the environment and life on Earth.

• No More Advancement - Because we are now relying on gas – especially because it is so cheap nowadays – since fracking is so effective at getting access to even the most difficult to reach deposits, we are not longer trying to find alternative energy sources. When we were worried about not being able to use cars, for instance, we started searching looking into solar powered cars. The danger with fracking is that we are no longer going to look for alternative energy sources as the sun or the wind. Instead, we will pump harmful chemicals into our environment and cause global warming to happen quicker.

Sources

http://inhabitat.com/infographic-the-costs-and-benefits-of-fracking/

http://www.conserve-energy-future.com/benefits-and-dangers-of-fracking.php

http://www.telegraph.co.uk/finance/personalfinance/investing/10901879/Before-you-back-Britains-fracking-boom-drill-down-into-the-details.html

http://www.bbc.co.uk/news/uk-14432401

https://www.theguardian.com/environment/2013/dec/19/uk-fracking-shale-gas

https://drive.google.com/file/d/0B9yps7sEuZl1T1phZmJwcXctTHc/view