Some economic thoughts on London

I'm in London right now.  I've been here for about a week leading a study-abroad trip.  It's been great overall, although unfortunately one student has been quite ill.  (She is getting better, thankfully.)

Some thoughts about London (and beyond London):

* Differences in the exchange rate makes a big difference to London's affordability.  The rate now is about 1.45 dollars/pound vs. 1.60 when I spent four months here in 2012.  But that means everything is about 10% cheaper.  Mentally it seems like London is much more affordable.

* London is expensive, but it only seems more expensive than central Pennsylvania for three reasons: housing is expensive, food at restaurants is expensive, and drinks at restaurants are expensive.  Entertainment, tours, clothing, etc. seem no more expensive than the states.

* West End theatre tickets are less expensive than Broadway.  And it isn't close.  For the cheapest ticket to Funny Girl - I paid 25 pounds.  That converts to about $36.  To compare - I bought a cheap ticket to a musical for June in New York called Waitress - that ticket was about $70.

* The tube is fantastic.  Public transportation only makes sense with a critical mass of people - but it is awesome when you have that.  It is just so convenient.  I recall hearing that the London transportation system (buses, tube, etc.) loses money.  But that's actually OK, as they would have spent some money on roads anyway without this system.

* Cambridge is a lovely city, and punting is fun!

Some pictures

Elaborating on the amount Hamilton ticker resellers make

I was quoted in this Bloomberg story as saying:

At least $30,000 from every show goes to ticket resellers instead of the musical’s investors, producers and cast, according to Matt Rousu, an economics professor at Susquehanna University. With eight shows a week, that comes out to $240,000 every seven days, or almost $12.5 million a year filling the pockets of brokers, he said.

How did I come up with my estimate of $30,000?

Resale tickets rarely sell for less than $800 on ticketmaster.  Some sell for $1500-$2000.  The average price of a ticket from the Richard Rodgers Theatre is about $100-$200.  So that means we can conservatively estimate $600+ per resold ticket is going to resellers.

If you look at Ticketmaster, there are resale tickets available - and usually from 50-200 seats for sale for each show.

If you assume that just 50 tickets are sold on the resale market (likely way too low) and resellers are getting $600 per ticket (also low), you come up with an estimate of "at least $30,000" going to resellers.  In reality, it is probably much more.

Quoted in a Bloomberg story about the musical Hamilton

Link here

It starts:

The Broadway hit “Hamilton” is making millions. It could be making millions more if not for scalpers snapping up seats and hawking them for $2,000 a piece or more.