Why London’s NYE Fireworks Display Broke Economics Textbooks

(Note: This was initially written in the BC days, 1/1/2019, and published to a small audience)

A fireworks display is the textbook example of a public good. It is both non-rivalrous (when person A views the display there are just as many fireworks in the sky for Person B to view, unlike private goods, where one person’s consumption reduces the available quantity left for other people to consume) and non-excludable (it doesn’t make economic or practical sense for the organisers of the fireworks display to actively exclude people from viewing it, say, by hiring security staff that will actively patrol and prevent people from looking up into the sky). It’s been my go-to example with students, friends and family for quite a few years.

As I learned yesterday, since 2014 the NYE fireworks display in London is a ticketed event, where 100,000 tickets are sold at £10 each. There are 9 official viewing areas [1], accessible only to ticket holders, with tube stations and side streets leading to non-restricted view parts of the city closed and gated. The public good goes private. What a remarkable thing.

To be fair, the decision to make the fireworks display a ticketed event is not about making a profit. The decision came after “around half a million people are estimated to have headed to see the display, putting enormous strain on transport and safety infrastructure” for the 2013 display. “Ticketing is not for profit — every penny of the £10 administration fee will be used to pay for the ticketing itself, and the extra infrastructure the decision to ticket will bring.” [2]

Happy new year everybody!

Pictured: closed side-streets leading to non-restricted view areas. Thousands gather to get a free, yet restricted, glimpse of the display.

[1] https://www.london.gov.uk/.../just-ticket-great-nye-london

[2] https://www.london.gov.uk/press-releases-6295

Trying to catch a glimpse of a restricted view, back in the days prior to social distancing.

Addendum (some more economics nerd talk)

Technically it’s fair to argue that London’s fireworks display became a common good before being transformed to a private good. A common good is still non-excludable, but it is rivalrous. Per the city of London’s press release [2]:

“The increasing popularity of the event has resulted in people turning up earlier each year, with capacity often being reached by early evening, leaving hundreds of thousands unable to get a good view or even see the display at all. Those who did arrive early enough faced hours waiting in often cold and cramped conditions.”

Trying to catch a glimpse of a restricted view, back in the days prior to social distancing.

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