Should College Basketball Ticket Prices be Equal?

The Daily Iowan has an article earlier this week on a report advocating that men's and women's basketball ticket prices should be equal. According to the article, "Rick Klatt, an Iowa associate athletics director was quoted as saying, 'Prices are set to a combination of what the public is willing to pay, what is required to balance the budget, and simple supply and demand'" (bold added). Additionally the article goes on and says, “[i]t is all driven by the market,” Purdue Associate Athletics Director Barb Kapp said. “[The Purdue athletics department] spends the same amount on both sports, but we charge more for men because that is simply what the market calls for.” Raising the price for women’s games would dramatically decrease attendance, she said.

The report, Ticket Office Sexism: The Gender Gap in Pricing for NCAA Division I Basketball by Laura Pappano and Allison J. Tracy, Ph.D., summarize their report as follows. "Our results showed significant gender gaps at every pricing and seating level with colleges charging a premium for male play", and "[a]nalysis of attendance figures further showed that the gender differential in price across schools is not accounted for by differences in attendance".

OK, as an economist I believe that well functioning market prices are a reflection of supply and demand. If demand for men's basketball is greater than women's basketball at equal prices, then market forces tend to increase the price for the service with higher demand. Since supply of seats is normally the same (since most NCAA schools play men's and women's games in the same venue), then the issue is on the demand side. Thus individuals attending NCAA basketball games have revealed that they have a greater preference for one gender's entertainment over another gender's entertainment. That is not the fault of the NCAA, but simply the reality that different people have different preferences.

Additionally, the authors state that, "... unlike professional franchises, colleges are non-profit organizations and, in many cases, public institutions", implying that profit-maximization is not a good reason to set ticket prices differently. That may or may not be true. As mentioned in the summary, market forces matter and the more competitive the market that a not-for-profit firm competes in, the more that not-for-profit firm behaves like a for-profit firm.

So what are some policy recommendations? One, the two authors could take the lead and campaign that all women from the president of the college to the lowest paid women earn the same salary. In fact, to make their point more stringently, they could volunteer that since their salaries are not the same as the lowest paid female employee, they are devaluing other women in the labor market, and voluntarily reduce their salary and give it to worthy causes that empower women, such as domestic violence or breast/ovarian cancer research.

The other policy recommendation is for Wellesley College to stop discriminating against female college students, (although I believe Wellesley is a female-only student body). Specifically, Wellesley College in 2007-08 charged $45,820 for a year's tuition. That is much higher than the sticker price of college tuition at the majority of other colleges and universities here in the US for both genders.

So why are the authors willing to accept higher salaries than other female employees at Wellesley and willing for Wellesley to charge their (female) students higher tuition fees than most other NCAA schools for either gender, but the authors find that differences in the ticket prices for college basketball is sexism?