Alan Krueger, President Barak Obama’s choice to head the White House Council of Economic Advisers, is not only a prestigious economic scholar, he is also somewhat of an expert on the ticketing industry.
While a professor at Princeton University at the turn of the millennium, Krueger began writing extensively about the rising cost of ticketing in the concert industry. He later added analysis of the secondary ticket market and why the primary often struggles to properly price events initially.
For a 2008 report called, “Evidence on the Secondary Market for Concert Tickets,” Krueger and co-author Marie Connolly Pray crunched information obtained from more than 3,000 concert fans and discovered that the secondary ticket market purchases accounted for 10 percent of the tickets bought. In addition, the average markup per resold ticket was between 45 percent and 60 percent.
“The main reason cited for buying tickets on the secondary market was to get better seats, which is confirmed by our observation that the resale rate for the best seats is twice that of average seats and close to five times that of the worst seats,” Krueger wrote.
He added that the secondary ticket market was an estimated $600 million in 2006. Forrester Research would later estimate that the secondary ticket market was growing at a rate of 12 percent annually and would reach $4 billion by 2012.
Krueger also observed that “reselling is much more common for shows that sell a higher proportion of tickets in the primary market.”
Artists routinely underprice tickets to their shows, Krueger argued, because “they want to maintain their image of charging a fair price,” a move that helps make the secondary market larger, particularly for premium seats. Those seats fetch the highest resell prices, and most interest overall, but in recent years some artists have kept those seats and priced them at significantly higher prices in an effort to capture more of those sales.
While he has studied the ticketing industry, Krueger is better known in government circles as an expert on employment and workforce issues, which is a priority for President Obama as he prepares to release a jobs plan next month.
Krueger’s appointment still requires approval by the U.S. Senate, and if approved he would replace departing chairman of the advisory panel Austan Goolsbee, who is returning to teach at the University of Chicago.
