Gregory Mankiw, an economics professor at Harvard, wrote this ringing economic defense of ticket scalping and price-gouging generally. In his essay, Prof Mankiw revisits the laws of supply and demand from his Econ 101 course to explain why he was more than happy to pay $5,000 (or maybe even $7,500) for two (or three) tickets to see the hit Broadway musical “Hamilton.” (Although the original title of his essay in print is “$2,500: a fair price for ‘Hamilton’,” Prof. Mankiw himself clarifies in the seventh paragraph of his piece that he paid “$2,500 a ticket,” so we assume that he also bought a ticket for his wife and maybe even for his teenage son, who were with him during his recent Columbus Day weekend visit to NYC.) In reply, Michael Hiltzik, a columnist for the L.A. Times, wrote this moralizing rebuttal to Prof Mankiw, arguing that price-gouging of non-luxury, essential products (like bottled water after a storm has hit) is immoral. (But who decides what is “essential”?) For our part, we agree with the likes of Mankiw that the price of something is just the product of supply and demand forces, but we agree with Hiltzik that $7,500 for three tickets for a Broadway musical is an obscene and offensive price. Prof Mankiw must have other significant sources of income (from private consulting work or textbook royalties, for example), in addition to his university professor salary.
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